The CFTC recently announced that Bitcoin would be treated as a commodity when it comes to financial regulation. Bitcoin will be treated just like wheat, corn, soybeans, gold, silver & all the other commodities going forward. As with anything, this milestone brings with it both positives and negatives for the digital currency marketplace.

Negatives

Let’s start with the bad news. With official regulation comes more control by the powers that be. More regulation means more meddling in your affairs and additional rules to follow. This can be annoying, costly, and prohibitive to new business opportunities. Regulation is the hallmark of government involvement in business and is oftentimes a mixed bag when it comes to real world applications.

Positives

On the bring side, regulation does bring certainty from a business perspective (we know what the government is going to do) along with consumer protections. People forget that regulation can be a good thing in that it provides a standardized and uniform process for everyone to follow. This sets the stage for a more level playing field that can be beneficial to entrepreneurs in the digital currency arena. Also, with Bitcoin being treated as a commodity it’s receiving the same treatment as historical money (precious metals). Interesting that old and new money should be classified as the same thing in the eyes of the law.

Gotta take the good with the bad. Bitcoin is slowly becoming more mainstream and a regulated part of the marketplace. It remains to be seen if this will stifle innovation or foster it. Either way, this will all be a part of the ongoing history of digital currencies and their nascent development during our lifetimes.