Bitcoins don’t have much to do with real estate or home loans… yet. A real estate broker in Manhattan has just allowed a home to be purchased using bitcoins. Now we have a currency – bitcoin – that is accepted, and that currency does not have any backing. It is not issued by a country. It is ‘mined’ using computers. Income earned via bitcoins is not taxed AND the owners are anonymous.
How can something that does not actually exist have value? As a Mortgage Banker we have to prove everything 5 times over to get a loan done. Yet, someone can have a cyber-account with money that does not actually exist, and purchase things with that?” Crazy.
Former Fed Chair Greenspan called it a “bubble” and said it is difficult to determine its “intrinsic value;” China has ruled it is not a currency and banned its banks from doing business in it; Bank of America has predicted it will become a “major means of payment for ecommerce;” current Fed Chair Bernanke said the Fed has no plans to regulate it; the ABA said bank interest in doing Bitcoin transactions is “not high” on the list of priorities; the Treasury is warning anyone using Bitcoin they will need to comply with regulations as a money transmitter and with anti-money laundering rules; China banned its country’s Bitcoin exchanges from accepting new inflows of cash and Denmark is working on standards around virtual currencies as it clamps down. Heck, we don’t even seem to know if we should capitalize the word!