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Every single Bitcoin transaction is recorded in a public ledger called the Blockchain. This means that anybody can see every transaction that has every occurred from and to a Bitcoin account. This makes Bitcoin much less attractive than cold-hard cash to money launderers.

It is perfectly normal for governments to ask Bitcoin exchange platforms to identify their customers for anti-money-laundering purposes. This should not however be achieved through regulations that are in effect discriminatory or overly burdensome.

Applying banking industry standards to small technology startups will not lead to positive outcomes, neither for the nascent industry nor its consumers.

Another well-meaning but misplaced concern is consumer protection. Bitcoin transactions are just like cash but take place over the Internet. This means that there is no intermediary and, consequently, no third party can stop or reverse the transaction.

This feature, which may at first glance seem problematic, is one of Bitcoin’s strengths: Consumer protection is achieved through cryptography rather than financial institutions, which makes Bitcoin cheaper and resistant to human error.

Security concerns linked to bad business practices, for which the Mt. Gox collapse was seen as an eternal “case-in-point,” are quickly disappearing as well. Competition between Bitcoin businesses to attract new customers is fierce, and only the ones who guarantee the highest level of consumer protection and ease-of-use will survive. Consumers have the power to punish bad business practices and reward innovative customer protection measures by choosing to deal only with the businesses that satisfy their needs.

Cryptocurrencies such as Bitcoin cannot be un-invented and regardless of one’s opinion of them, they are here to stay. The question of importance is whether the businesses that grow around the Bitcoin technology will establish themselves in Canada or go elsewhere.

Francis Pouliot is director of public affairs, Bitcoin Foundation Canada