Whether you see Bitcoin as the key to a free, utopian form of economy, or as a regulation-free mystery of the digital age, it has, to this point, thrived outside of the standard rules that dictate how finance traditionally functions. Blockchain, the technology that has enabled Bitcoin to remain a maverick of the fintech industry, exists on fundamental security systems that make traditional regulators unnecessary. But blockchain, and by extension Bitcoin, may not live outside of the reach of financial regulators for much longer.
In December, the Federal Reserve released a report, “Distributed ledger technology in payments, clearing, and settlement,” that may indicate its first moves toward reining in blockchain’s currency applications. It was one of many government entities to release its views on the technology towards the beginning of 2017, joining the People’s Bank of China, for instance.