Latest Regulations Have Harmed Loaded Physical Bitcoins and Their Once Growing Demand
As Bitcoin (BTC) has recently celebrated its tenth anniversary, enthusiasts and companies have been trying to open new businesses related to it.
Some of the most interesting projects were related to manufacturing loaded physical bitcoins. However, due to regulations in the space, the industry experienced some difficulties.
Manufacturing Loaded Bitcoins not Profitable Anymore
Bitcoin enthusiasts used to hold their Bitcoins in paper wallets. However, this changed and became more sophisticated. Users decided to create physical coins that represent a specific amount of Bitcoin.
One of the most popular collectors of physical BTC was Casascius, however, the sales of items containing digital bitcoins were suspended as of November 27, 2013.
Mike Caldwell, the creator of this website, faced different problems with the U.S. Financial Crimes Enforcement Network (FinCEN). The business was shut down by this agency after considering the project as illegal money transmission.
Between 2013 and 2016, physical digital assets such as Bitcoin became very popular. Some collectors were demanding these coins at all times. Some of these coins had a higher value than the one they’ve held inside. Some other companies operating in the market and that had to shut down their operations were Ravenbit, Alitin Mint, Cryptmint and Titan Bitcoin.
Back in April 2018, Satori Coin explained that it had to shut down its operations after anti-money laundering (AML) and know your customer (KYC) policies were introduced in the country. The Financial Services Agency (FSA) has been imposing strict regulations in the market to avoid fraudulent activities and scams in the market.
Bobby Lee, the co-founder of BTCC, a company that was also selling these physical digital currencies, said that sells in China reached a record before shutting down its operations in 2018. At the moment, users that want to purchase loaded coins have to do it through different e-commerce websites such as e-Bay.
One of the main reasons behind the fall of these firms is due to the fact that there are several regulations that do not allow them to grow. Using physical bitcoins loaded with BTC is something that some countries do not accept because these coins could eventually replace the local fiat currency or, at least, compete against it.