I’m from Hanover, Germany and was surprised to see that since September 2016 my electric/gas/water company added a QR code to their bills to easily pay bills with Bitcoin [1] (They have super informative bills with easy to read charts as well). They even have service center support staff that will help you if you don’t know how to get/use bitcoin. There were (haven’t checked in a while) multiple listings for flats (we Germans tend to rent) that offered payment in bitcoin a year back and multiple little bars and cafes also offered payment with Bitcoin. I’m pretty sure I could live by doing >80% of all my outgoing payments in Bitcoin (if it weren’t for the high tx fees).
[1] - https://blog.energybrainpool.com/en/german-regional-utility-...
You definitely CAN pay your bill in BTC, it's just harder than most people want to mess with.
Jack's complete lack of surprise has reached a new low.
This really is no different than dealing in cash presently. Employees still need to report their income, even when paid in cash, so even in that event they'd still be subject to any laundering concerns of the federal government given the paper trail follows back to the dispensary entity. Same with any other entities they're paying in cash (unless they are dodging reporting requirements).
Crypto solves the problem (partially) of where to store your revenue instead of a bank. Its just a better way than the alternative of paying security outfits to guard your heaps of cash— its judgment-resistant and reasonably easy to liquidate.
The biggest problem with that use case right now is obviously price fluctuations. Not sure anyone is comfortable using a volatile asset class for that at present.
How exactly? You run a pot shop and end the day with $10,000 in USD. What happens next?
You need to physically have an armored transport take it to whoever is selling you the cryptocurrency.
Edit: I guess that's a potentially profitable but unfulfilled niche. Create a company that can take cash in big amounts and sell cryptocurrency. Not sure how feasible is it but that is the missing link as I see it.
That just pushes the problem down the road to somebody else, though. At the end of the day somebody's going to have a huge pile of cash, and no bank will accept it without knowing where it came from.
I guess this really does boil down to a federal vs state legality then?
So if it's legal in a federal level then banks should be able to accept the cash right? or would they have a "right to refuse the business because we don't like it even if it's legal at the federal and the state level"?
The problem is they would fall under the same money laundering rules that banks are and would probably not want to take dispensary cash. Even if they do take the cash, where would they deposit it?
I believe this is commonly referred to as an exchange. I believe there are quite a few in existence already.
Let's assume there is no federal vs state legality issues and instead it's just "legal". If selling X product generates large quantities of cash, is that organised crime?
I would think not, but then again I'm not a lawyer so I could be wrong. If I am wrong then yeah, the idea is definitely not sound.
Taking in large sums of cash and swapping it over for some cryptocurrency or another is bound to attract at least a few people who have need to launder cash. Thus, the service is likely to run afoul of Know Your Customer regulations etc etc.
As others have pointed out elsewhere in the comments, we ought, in my opinion, fully legalise and regulate the industry.
Selling marijuana in the United States is not a legal activity. It's a federally prohibited activity that if you are really successful at it (simply by amount of money made) can be charged as a felony with a mandatory life sentence (in the no-parole federal system, where a life sentence actually means life.)
But at some point, you, the skinny geek with your bags of cash and bitcoins is gonna run into people who have already solved this problem and have been doing it for the past 40+ years. The drug cartels. Probably gonna be some conflict there.
Cryptocurrencies that dodge regulations do not; their value is backed by the greater fool theory and the fact that this new retail wave aren't too familiar with AML/KYC/counterparty risk
To address your last point, a non-gubmint backed stablecoin would address that, but then again, perpetual motion devices would probably stop energy issues.
The sad thing is I bet I could make millions...
People need security through legality. This just needs to be... not illegal.
I'm surprised nobody created a bank/exchange to take advantage of the situation.
You may not like it but KYC/AML regulations exist and are enforced.
The question on everyone's lips is: in what way is storing money in a bank a problem.
Any way you slice it banks are a number of solutions. Problems not so much.
You should be more concerned about how you demonstrate it's not laundering, because in more and more jurisdictions KYC (Known Your Customer) regulations in banking means you will in more and more circumstances get questions about where your money came from and potentially be asked to prove it.
This may or may not affect your jurisdiction now, but these will likely get more common as crypto spreads.
E.g. my ex bought a house recently, and part of the funds she paid the deposit with were transferred from her sister as part of her inheritance from her dad. Which created a whole circus with her lawyer, who was obligated to be certain they were not dealing with laundering, of digging up not just her statements, but dealing with requests for her sisters bank statements, and documentation of the source.
If one of those steps is effectively a tumbler, the answer may very well be "you can't prove the money is clean; we can't deal with you, and we have to report this"
No need to make any specific approach illegal even - just require that anyone you make large payments to are sufficiently satisfied the source is clean, which will be exceedingly hard for users of methods that obscure where it's from.