In a report published today, the Swiss government answers questions raised in two parliamentary postulates. The report concludes that Bitcoin is covered by existing laws and that no new regulation is needed. This is excellent news and in full accordance with our views. Furthermore, the report confirms that Bitcoins are neither a good nor a service – which is relevant when deciding whether VAT applies when selling Bitcoins (it should not). Furthermore, the report says that the only thing Bitcoin currently lacks to be money like other currencies is low volatility. As volatility is decreasing, is should thus only be a matter of time until Bitcoin officially gets the legal status of “money”.
A side remark regarding miners: On question the report leaves unanswered is whether miners should be classified as financial intermediaries. Probably, the federal council sees this as a detail to be left to FINMA. In our view, miners do not require such a license because miners never take possession of the Bitcoins they process. So unlike with banks, there is no risk of embezzlement and thus no necessity to protect consumers from that. Also note that technically, most miners do not process transactions – it is the mining pool that does that for them. Instead, miners should be legally seen as someone selling computing power to a mining pool.