Is Regulation A Help Or Hindrance To Bitcoin?

As more and more regulated exchanges dealing in cryptocurrency trade emerge, the question of whether or not regulation takes away from the allure of bitcoin has been raised by many of the digital currency's supporters. Central banks around the world are beginning to take notice of bitcoin and new restrictions could take away from the anonymity that many bitcoin enthusiasts enjoyed.

Most emerging exchanges believe that regulation is a key component in gaining mainstream popularity. For the average investor, putting money into a completely unregulated market could feel a bit like putting it all on black at the casino. Regulation and security makes dipping a toe into a new market feel more comfortable, especially with all of the negative publicity bitcoin has received in the past year.

This month the UK treasury announced its own interests in the digital currency space, saying that new anti-money laundering rules would be put into place in order to protect the growing industry. Small bitcoin-businesses cheered the proposal, saying that the rules would not only legitimize their industry in the eyes of the public, but that they will likely open banks' doors to startups dealing in digital currencies that are looking for small business loans.

While most bitcoin supporters recognize that the cryptocurrency won't gain traction without some government intervention, many say it kills one of the best reasons to jump on board the bitcoin train. Rover Ver, who has been called the "Bitcoin Jesus" told

that regulations weigh down innovation more than they build bitcoin up. Ver said he recognizes the importance of regulation in promoting mainstream adoption, but pointed out that digital currencies would move faster and further without the government's red tape.