Cryptocurrencies, having already made a strong presence years back since its inception, have been making rounds in the news over the past few weeks.

While online payment options such as PayPal and other online facilities have been the ones spearheading the payment transfer field, Bitcoin has also made its presence felt in the same field.

Bitcoin has made use of peer-to-peer transaction technology, allowing individuals to transfer money online. Despite the innovation behind Blockchain technology, the problem still lies in the fact that regulations and laws within the field of Bitcoin are lacking and that there remain gray areas due to the inadequate legal framework.

Bitcoin needs government backing to scale?

While many investors and businessmen are already looking towards the potential of Blockchain technology as a revolutionary one in the field of finance, it still needs support from the government in order to fully impact the world.

In a report by Fortune, it was noted that government insight and regulation was needed on how to handle the licenses of Bitcoin companies as well as taxes. For example, Bitcoin companies that transfer Bitcoins on behalf of people require a money transmission license, however, companies which don’t transfer on behalf of users don’t require such licenses.

No standard regulations in place

While Bitcoin investors cannot avoid taxes when they invest in Bitcoin, there are no standard and fixed rules regarding the taxation of Bitcoins. In fact, the IRS has recently been under fire for wanting to collect the records of all users of Bitcoin exchange Coinbase for taxation investigation purposes.

In a news report, Congress leaders were questioning the IRS as to what basis the IRS had for demanding the release of Coinbase user records. They claim that this action is highly intrusive and does not have solid basis due to the lack of solid regulations surrounding Bitcoin taxation.