This week saw a lot of politics happening around Bitcoin, of various sorts. First there’s been some talk for a while now in the European Union about whether Bitcoin should be subject to VAT (Value Added Tax) or not–so far a European Court of Justice Official has argued for exempting bitcoin due to its nature as a currency. And next it looks like the Russian President Vladamir Putin decided to talk about cryptocurrencies, including Bitcoin, where he showed some misgivings about the technology as money but buys into the “blockchain good” mentality.

Bitcoin startup BitX received $4 million in Series A funding this week to expand adoption of bitcoin in emerging markets such as those in Africa. And Coinffeine, an ad hoc distributed bitcoin exchange platform, just launched a beta and is looking for participants to run nodes and trade some bitcoins.

Finally Bitcoin dev Jeff Garzik posted a tweet last night shining a light on Bitcoin Core developer discussions relating to the block size debate and policy. While this discussion has been going on for a while, it seems like the public drama involving decision making amidst policy making and decisions seems to continue to generate news.

This and more in this week’s Bitcoin Weekly.

European Court of Justice Official proposes Bitcoin exemption from VAT

VAT or Value Added Tax is a tax form in the European Union that affects goods and services sold to consumers. When examining bitcoin transactions, Advocate General Juliane Kokott argued to the court that bitcoin trades should be exempt from VAT.

She cited exiting exemptions as reasoning for this because Bitcoin is neither a good nor a service and it is instead used as a store and transfer of value (much like a currency).

Swedish news site Dn.se reported her statement: “Bitcoin is a means of payment and that the exchange should therefore be exempted VAT obligations.”

CoinTelegraph further reports that the court findings show Bitcoin to act as a currency and that bitcoin ownership has no end point other than to be used again for trade as with a currency. Therefore, like any currency, bitcoins should not be subject to VAT.

Bitcoin is already exempt from VAT in several European countries including Spain, the United Kingdom and Germany. The General Directorate of Taxes (DGT), a European Union body that co-ordinates taxation policy across the EU, announced in April that Bitcoin is considered a medium of payment or a financial service, and therefore is not subject to VAT similar to other financial services or devices.

Image credit Wikimedia.org, via Russian Presidential Press and Information Office

Russian President Vladimir Putin talks about Bitcoin?

Last week Vladimir Putin, the President of Russia, took to the airwaves to say some things about Bitcoin. CoinDesk reports that Putin found the Bank of Russia, the country’s central bank, had done a good job with embracing new technologies. He also spoke to some misgivings about virtual currencies (as money) but felt okay with blockchain technologies as tracking or calculation services.

“[Bitcoins] are backed by nothing. This money [is backed by nothing], that’s the point, this is the major problem. They are not really linked to anything and backed by nothing,” Putin said. “However as an accounting unit, these ‘coins’ or whatever are they called, they can be used, and their adoption becomes wider and wider. As some kind of unit in some account, probably, it’s possible.”

Putin continued: “We do not reject anything, but there are serious, really fundamental issues related to its wider usage, at least, today.”

A spokesperson, however, clarified Putin’s statements later to say he was speaking to all digital currencies and not just Bitcoin in his commentary.

Numerous Russian outlets reported on Putin’s words including Gazeta, as well as Russian controlled media outlets RIA and TASS (note: all Russian language sites).

Bitcoin startup BitX raises $4m

BitX, a Singapore-based startup centered on Bitcoin financial solutions, just raised $4 million in Series A funding from PayU, a subsidiary of South African multinational mass media corporation Naspers. Existing investor Barry Silbert’s Digital Currency Group also participated.

BitX launched in 2013 with a mission to push adoption of Bitcoin in emerging markets and while it has headquarters in Singapore, also boasts offices in Cape Town and Jakarta.

The company features a bitcoin exchange as well as a mobile bitcoin wallet for Android and iOS. For developers, the BitX API is available to get market data, trade on the market, and even lock quotes for a short time.

The company is currently expanding through emerging markets in Indonesia, Kenya, Malaysia, Nigeria, and South Africa. The utility of bitcoin in markets such as Africa and others with similar dynamics has been brought up before where bitcoin could be used as a medium of exchange for people in poorly-banked regions.

Coinffeine distributed market launches into open beta

Coinffeine, a distributed market for buying and selling bitcoins, has launched its open beta in order to bring in community support and conversation about the platform. As a beta, Coinffeine will be released in an as-is basis to get opinions, but it’s also currently in development, which means that the platform will change as time goes on.

The platform is currently available for Windows, Mac OS X and Linux. The client is available currently via the website and is in its 0.10.1 version. Coinffeine runs as a desktop client and not web-based software. The exchange exists completely distributed between traders who execute the desktop client and connect together to form the ad hoc marketplace.

You will need a small amount of bitcoins to seed your account to use Coinffeine. This is because the platform requires a small number of bitcoins present in order to execute trades.

The platform will initially only support bitcoin to fiat exchanges—but the team says that it is not beyond exploring crypto-to-crypto exchanges in the future. The platform also only supports OKPay for fiat currency exchange; so anyone who has a current OKPay account can connect it to Coinffeine.

The OKPay-only support has become central to criticisms some users have for the platform (due to OKPay being an iffy processor for some users), but the team also plans to add support for more payment processors as the beta progresses.

Coders and engineers interested in the Coinffeine platform can also look at the GitHub repository for the project. The platform is an open source project hoping to take user opinion and suggestions to enhance its capabilities.

Disappointing. New #Bitcoin Core policy: stealth fee increases https://t.co/pir9uUOLet Zero plan to communicate this to BTC users :(

— Jeff Garzik (@jgarzik) July 21, 2015

Jeff Garzik not happy with direction Bitcoin core devs taking block size policy

The Bitcoin block size debate has been going on for some time now, with suggestions and criticisms coming from a multitude of angles. This is a discussion that involves a lot of smart people with a great deal of interest tied up in the Bitcoin protocol and technology. Since 2014, Gavin Andresen, Bitcoin core dev, has been weighing in on block size and scalability (May, June).

Recently, Jeff Garzik, Bitcoin core developer working for BitPay, tweeted his displeasure at he calls a stealth fee increase. And he links to a lengthy discussion between Bitcoin developers on GitHub. The conversation still continues at time of writing—and it appears to revolve around the block size discussion (see links above).

Luke Dashjr, also in the linked discussion, went to Reddit and tried to illuminate the confounding nature of the discussion on.

“Jeff’s claim here appears to be that Core had previously implemented a policy of setting mining-policy defaults such that fee pressure was kept to a minimum,” he wrote, and added: “However, I am not aware that was ever the case.”

Dashjr also added that he and others have long been stressing the need of miners to configure policy on their own for some time. This may be especially true in the matter of block size (and other protocol policy changes) as miners do block discovery and their participation and consensus stabilizes Bitcoin as it is.

Alex “Sandy” Pentland of MIT about Enigma and using the Bitcoin blockchain

Enigma is an MIT project with an interesting name that proposes using the Bitcoin blockchain to help secure and track encrypted data enabling it to be processed while still encrypted. This technology could give way to a great deal of uses cases where highly secure information–medical and financial, for example–needs to be processed for actionable information, but not all entities who pass it along can be trusted. (Not to mention potential hackers seeking juicy data.)

Today Pentland spoke to SiliconANGLE Media’s theCube and addressed this project. It has been previously mentioned in Bitcoin Weekly for readers interested in the nitty-gritty details.

Featured image credit: Via Associated Press.