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Weekly Bitcoin Update – 1.7.14

A recap of the week’s biggest Bitcoin stories from the perspectives of the best sources for e-currency news around the web

Industry News

The U.S. government held a bitcoin auction on Friday, June 27th. According to MarketWatch, the government’s supply of digital currency was in high demand, with 63 total registered bids. Individuals interested in the auction include SecondMarket’s Barry Silbert, Coinbase’s Fred Ehrsam, Pantera Capital, and Circle. According to Bloomberg, the total worth of the bitcoin auctioned off was $17.4M.

Stripe CTO Greg Brockman stated this week that he believed bitcoin could serve as “something that can help connect the world’s financial systems in a way that we cannot today,” CoinDesk reports. At the Bitcoin Finance conference in Dublin, Brockman will speak of the need to connect the online currency with the average consumer and the role it could have in the mainstream. The San Francisco-based company has been testing bitcoin payments since March.

According to a report, MasterCard has filed a patent and will be looking to utilize bitcoin in its global online shopping cart. Specifically, the company has classified the currency under “non-traditional modes or sources of payment.” Gemalto, Visa, and Western Union have also previously sought patent protection for digital currency.

On July 28th, New York job seekers convened at the Bitcoin Job Fair to network. It was reported that employers at the event were interested in potential employees with different skill sets and saw the event as a sign that bitcoin is entering the mainstream. Interestingly, job seekers at the event were also interested in finding positions that would pay them in bitcoin. The latest job fair came eight weeks after San Francisco’s own Bitcoin Job Fair.

Kuwait Financial Centre, also known as Markaz, released a report last week that held bitcoin as capable of boosting e-commerce in the Middle East, CoinDesk reports. The report, titled, ‘Disruptive Technology: Bitcoins, Currency Reinvented?’ offered an introduction to bitcoin intended for investors in Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the United Arab Emirates (UAE). The report highlighted the compatibility of the online currency with the region’s youthful demographic and high smartphone volume.

According to TechCrunch, the online currency is now being used in conjunction with social media for the purpose of extorting money. The combination of the two online resources enables extortionists to remain anonymous while making their demands. A recent victim of the fraud includes a Domino’s pizzeria in France.

In lighter bitcoin news, NewsBTC reports that the curreny has received yet another celebrity endorsement. Ashton Kutcher, best known for his work on Fox and CBS sitcoms That ’70s Show and Two and a Half Men, recently stated on Quora that purchasing bitcoin, along with “fractional shares of blue chip stocks,” was a smart way to invest $25. Kutcher’s public endorsement of the online currency is another sign that bitcoin is entering the mainstream.

Policy News

A new California law has removed a ban on currencies other than the US dollar, freeing Bitcoin and other non-traditional currencies for usage in the state, PCWorld reports. The new bill shall repeal Section 107, which previously prohibited “a corporation, flexible purpose corporation, association, or individual form issuing or putting in circulation, as money, anything but the lawful money of the United States” (CA.gov).

The Internal Revenue Service stated on June 30th that they would not be “requiring that digital (or virtual) currency accounts be reported on an FBAR at this time,” Forbes.com reports. Currently, the FBAR, or Report of Foreign Bank and Financial Accounts, considers financial accounts to include various types of bank accounts, insurance policies, securities, and mutual funds. However, despite there being such a larger number of different bank and financial accounts that require reporting, the IRS does not require that Bitcoin be filed at this time. That being said, the organization did state that it “may consider requiring such accounts to be reported in the future.”

ABC Australia News reports that the Australian Tax Office will not rule on the status of bitcoin for the time being. Currently, bitcoin is considered neither currency nor property. As a result, Australian businesses must move forward without knowing what taxes they may face later on. Knowing the importance such a decision could mean for future Australian regulations, ABC Australia finds the ATO is currently balancing the technicalities of the ruling along with the suspicion that individuals may be using bitcoin to avoid paying taxes.

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