Bitcoin is slowly joining the big league of currencies. Germany has become the first country to accept the digital money as legal tender - recognized in law and for tax purposes. Katie Pilbeam from RT's Venture Capital program explains.
Transcript
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Global official currencies have now got a new addition to the family. Germany has become the first country to officially recognize virtual bitcoins as legal tender, valid for legal and tax purposes. Well, RT's host of the Venture Capital program, Katie Pilbeam, joins me now with more. So, Ashley, incredible news, in fact, for Germany.
So what does it actually mean? What will change for Germans using the bitcoin now? Right, well, the fact that it's illegal is great for the image of the bitcoin. The very fact that people haven't got to worry about breaking a law, or they can buy their goods and services very freely.
And it's great for the transparency, for the trustworthiness of the coin. As we know, since its introduction four years ago, it's not been short of controversy, that's for sure. And that's because it has had accusations of money laundering, drug smuggling, and that's because it doesn't have any association with the central bank or central government. And maybe this is something that makes it even more appealing, now that Europe has gripped the crisis.
And also currency manipulation and debt as well. That's what makes it so important. That's what makes it so alluring, that people don't want that intervention from government. But as well as that, like I say, there's also the negative connotations that come with that as well, because you don't have the regulation.
Absolutely. That's a problem. So by making it legal, it's a step towards that. But you know what, it might take some educating, actually, because not that many people know about it, you know, how they can get it, because it's not really easy to get it.
The process of getting bitcoin is called mining, and it's also through some, you know, mathematical sort of codes, and stuff, so you can't really get it. Yeah, it's really complex. And it doesn't exist in a tangible form, which is confusing in itself. That's right, it's virtual.
It is virtual. But really, for me, I see this as Germany's rubber stamp of approval. It's Germany saying, well, it's legal. And also, Germany is the so-called powerhouse of Europe.
So if Germany is going to use it, they're saying it's okay, then why can't the rest of Europe follow suit? Yeah, the others might follow suit, and it's the first EU country that's using it. Indeed, the very first. So it is significant, to say the least, and it's been a very interesting one.
It's been an interesting month as well, we have to remember, because Thailand said it was illegal at the end of July. They banned it as a currency. But first week of August, we had a court in Texas saying that it was legal. And this makes the value of the coin incredibly tumultuous, very volatile.
Actually, the U.S. is looking at it as well, and maybe with a possibility of regulating it somehow in the future. So we will see. Looking more feasible now, isn't it?
Looking more feasible now. Because it's Germany. Absolutely. Well, you know, given all pros and cons.
What does this move mean for Bitcoin then? I think it's most definitely a positive, because it means that there's two sides of the coin, excuse the pun. It's not all negatives, for sure, because the Thailand moment was a bad point for the Bitcoin. But right now it's looking positive.
There's definitely two thumbs up from Germany. So Bitcoin is looking upbeat at this point. All right. Katie, thank you so much for explaining this to us.