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BitCoin just for geeks, says MasterCard

David Ramli (via AFR) | May 7, 2013
MasterCard's global head of emerging payments, Jorn Lambert, has labelled BitCoin as a currency for "geeks" that will not reach mass adoption, despite experts warning it must be regulated to avoid being used for tax evasion.

"Absolutely this does [make tax evasion easier] and tax evasion is a predicate crime to money laundering," he said. "There isn't a lot of evidence that tax evaders have made large use of BitCoin, but there's an opportunity now to get ahead of it.

"These things are often positive developments and the question is simply 'what are the safeguards that need to be put on them so ­criminals don't misuse them?'"

But Deloitte's Centre for the Edge partner Peter Williams said BitCoin was an unstoppable force that would stabilise over time as more people bought into it.

"By its very nature it can't be regulated [and] you can't arrest an algorithm," he said. "You've got lawyers saying they'll accept BitCoins so their high-integrity clients can't be traced. But the whole issue is you can't stop it. You can ban it in the same way you can ban guns and drugs but people will still do it."

Mr Williams said tax authorities were increasingly keen to tax income made using BitCoins by regulating exchange houses such as the popular site Mt Gox.

"However, the cost of chasing that revenue is probably greater than the value you'd extract from the tax liabilities that exist," he said. "Like any new emergent disruption the incumbents tend to denigrate, deny and try to sue but ­unfor­tunately in this case they can't sue anyone because no one knows who [BitCoin founder] Satoshi Nakamoto is."

 

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