Is Bitcoin Money? US District Judge Thinks So
Bitcoin has been called a fair few things in recent years, although hardly anyone labels it as ‘money’. One US District Judge strongly feels Bitcoin is a form of money. This decision will affect the charges against Anthony Murgio, who used to run the Coin.mx Bitcoin exchange.
Another Setback For The Former Coin.mx Operator
Having Bitcoin declared as money is the last thing Anthony Murgio wanted to hear. He tried to convince the federal judge on his case of how Bitcoin is not ‘money’ under federal law. If Bitcoin were to be labeled as money, he would face severe penalties for running an unlicensed exchange as a money transmitter.
Things aren’t looking that good for Murgio now that US District Judge Alison Nathan has labeled Bitcoin as money. It is not the first time a judge declares Bitcoin to be a form of money either. In a 2014 court case, Judge Jed Rakoff echoed the same sentiment. The status of Bitcoin has been questioned by officials and financial experts for quite some time now. But these rulings go to show it is money just like any other form of currency commonly used in the world today.
US District Judge Alison Nathan explained the decision as follows,
“Bitcoins are funds within the plain meaning of that term. Bitcoins can be accepted as a payment for goods and services or bought directly from an exchange with a bank account. They therefore function as pecuniary resources and are used as a medium of exchange and a means of payment.”
One of the lawyers defending Anthony Murgio, in this case, disagrees with the decision. It is uncertain what the defense team will attempt to have this decision overturned, though. For Murgio, the year 2016 has not been a positive one. In April of this year, his father Michael was charged with participation in bribery aimed at supporting the Coin.mx exchange platform.
Although these are two individual events where Bitcoin is deemed to be money, the evidence cannot be ignored. As Judge Nathan pointed out, Bitcoin is often being used to pay for goods and services. It is also accessible to anyone in the world who wants to buy or sell it. All of this makes the popular cryptocurrency viable as a monetary unit, despite not being issued or controlled by central banks.
Can Bitcoin Be Money By Definition?
There are specific requirements for any currency to be labeled as money in the traditional sense. Cryptocurrency needs to be fungible. This is a topic of substantial debate in the Bitcoin world, as the cryptocurrency is not exactly fungible.This is partially due to price volatility, but also because acceptance of Bitcoin is too low. For now, Bitcoin is not a useful unit of account, but that does not mean it never will be.
If Bitcoin is to become a meaningful measure of value, people all over the world need to spend cryptocurrency consistently. That also means funds cannot be transferred through exchanges. Most companies accepting Bitcoin payments will convert transactions to fiat currency right away. That situation will have to come to change as well.
One thing Bitcoin certainly lacks is having purchase amounts denominated in Bitcoin itself. Most platforms and store owners convert the local currency price to its Bitcoin value on the fly. This ‘fear’ of holding onto Bitcoin is hurting cryptocurrency’s chances of being labeled as money in the traditional sense. Until a nation pegs its currency to Bitcoin – a very unlikely scenario – it will not be a viable unit of account. By definition, that means Bitcoin lacks one of the most important traits on the way to becoming money.