Bank of America report: Bitcoin can become a major means of payment

Bitcoin continues to grow strong, maintaining a value above the $1,000 mark that it recently broke.  Though some still doubt Bitcoin will ever become a viable currency, analysts at the  Bank of America Merrill Lynch believe that it has the power to be one.

In a research report released by the bank today, BoA analysts stated that they “believe Bitcoin can become a major means of payment for e-commerce and may emerge as a serious competitor to traditional money transfer providers,” and added that it has a clear potential for growth as a medium of exchange.

The reason behind this belief is that Bitcoin helps users avoid high taxes, capital controls, and confiscation, and the fact that Bitcoin transactions are publicly available and every Bitcoin has a unique transaction history that cannot be altered, makes it a more appealing currency than those already existing.  Unfortunately, the same characteristics make it quite appealing for black market and illicit transactions too, and BoA believes that the cryptocurrency could be stigmatized by those who use it for those purposes.

This reason is the why China has just decided to ban its banks from using Bitcoin, though citizens are still allowed to spend their cryptocurrency if they wish.

“Although there are people calling it a ‘currency’, it is not issued by the monetary authority, it does not possess the attributes of a currency such as legal repayment and enforcement abilities,” the People’s Bank of China said in its (Chinese-language) missive.

“Judged by its nature, Bitcoin is one particular kind of a virtual product. It does not have the legal status of a currency, and it cannot and moreover should not be allowed to circulate in the market as a currency.”

China’s central bank added that the anonymity of using Bitcoins makes it difficult to monitor capital flows, meaning that it could be used to facilitate money laundering and financing for terrorist activities.

The research released by Bank of America Merrill Lynch analysts sheds new light on how people see Bitcoin as a currency.  This just proves banks’ previous apprehension about cryptocurrencies becoming a huge threat to real currencies, as they now know it means business.  And with more people investing on Bitcoin and using it for personal or business transactions, it might not be too long before Bitcoin gains wide acceptance as an online currency.

photo credit: zcopley via photopin cc

About Mellisa Tolentino

Mellisa is a staff writer for SiliconAngle, covering social and mobile news. She is fascinated by technology and loves imparting what she learns through her journey as a writer. Got a news story or tip? Send it to mellisa@siliconangle.com