Senate drops its digital currency report in bitcoin's ledger
Canada's Senate recommends 'light touch' when regulating digital currencies
The official ledger of all bitcoin transactions now contains something a little unusual — courtesy of the Canadian Senate.
The Standing Senate Committee on Banking Trade and Commerce released its new report on digital currency late last week, not just on the Parliament of Canada website, but also by posting a message in the bitcoin blockchain — the public ledger of all transactions involving bitcoin, by far the world's most popular digital currency.
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That was done "mostly for fun, and partly as a nod to the community," wrote Jeff Coleman, chief technology officer at Toronto-based technology consultants Decentral, posting on Reddit as "emansipater". Coleman posted a link to the message on the social news site, accompanied by another file called a "proof of existence," which is used in bitcoin transactions to publicly prove the existence of certain data without having to reveal it.
Alberta Senator Doug Black, who sits on the committee, tweeted a confirmation of the release linking to the Reddit post.
The blockchain is a real innovation. We published the Banking cmte report on digital currency & <a href="https://twitter.com/hashtag/bitcoin?src=hash">#bitcoin</a> there today: <a href="http://t.co/yN9hAZYckG">http://t.co/yN9hAZYckG</a>—@DougBlackAB
Coleman wrote that Decentral was approached by a Senate staffer who asked for help making the post to the bitcoin blockchain. Decentral specializes in blockchain and decentralized technologies like bitcoin.
Bitcoin is a digital or "virtual" currency designed to make it easy to send money over the internet. Unlike traditional currencies, it's not controlled by a central authority such as a bank. Instead, it's a decentralized currency run collectively by users using open-source, peer-to-peer software.
Since bitcoin came into existence in 2009, governments have struggled with how to deal with digital currencies like it.
'Almost a hands off approach'
The new Senate report itself calls for a "light " touch — "almost a hands off approach" — when regulating digital currencies like bitcoin.
"New technologies attendant to cryptocurrency have unimagined applications," the report says.
"We've heard, and we agree, that blockchain technology is at a delicate stage in its development and use. This is why we urge the government to explore the vast potential of this technology, while treading carefully when contemplating regulations that may restrict and stifle its use and development."
The report notes that the technology's security features have the advantage of letting people take control of their online identity and prevent identity theft. It acknowledges concerns that the anonymity provided by bitcoin is an opportunity for criminals and terrorists.
The report includes eight recommendations about the technology and its regulation such as:
- Requiring digital currency exchanges, with the exclusion of businesses that solely provide wallet services, to meet the same requirements as money services businesses in order to discourage use by criminals.
- Considering using related technology to deliver government services "when advantageous."
The Bitcoin Alliance of Canada, a non-profit organization that raises awareness about bitcoin, commended the report's "sound recommendations."