This article provides a good counterpoint to Marc Andreessen's position on Bitcoin. With the IRS suggesting that Bitcoin miners, who add transactions to the “block chain”, may be subject to capital gains tax and Benjamin Lawsky's proposed scheme for the licensing and regulation of Bitcoin mean that many in the financial industry are less fearful of Bitcoin’s power to disrupt their dominance than might be thought.
In theory, the banks present themselves as big supporters of the idea of moving money in real time, securely, across borders, at little cost. But they vehemently disagree with the idea that Bitcoin and its associated protocols provide the best channel to achieve that objective. “I agree with real time digitization,” Dimon said. “The issue I have with Bitcoin is that it’s not about the technology -- it’s about governments. When people form nations, one of the first things they do is form a currency. Are regulators and governments really going to foster Bitcoin over a long period of time? I think the answer is no.” This is, of course, an argument based as much on emotion as anything else: The wager of Dimon and others in the industry is that the territoriality of regulators and sovereign governments will work to keep Bitcoin on the margins of the global financial system. And there’s another dimension: Bank leaders are betting that the innate human need for security and authority when it comes to the movement of money works so powerfully that most consumers will be uncomfortable with the idea of transacting across a decentralized, non government-backed payment network.