South Dublin Council has rejected a motion which would have seen it accept payment from the public for services such as property tax, parking fines, or swimming pool fees in the cryptocurrency bitcoin.
On Monday February 12th 2018, Clonalkin Fianna Fáil Councillor Trevor Gilligan put forward a motion “That this council accepts bitcoin as a form of payment for services rendered to the public”.
However, members of South Dublin Council rejected the proposals, with the Council stating: "It is not recommended that the Council accepts bitcoins from third parties until the Central Bank acknowledges the currency as a secure and financially reliable means of transacting cash."
Mr Gilligan argued that the money could have gone towards local services for residents, and the use of cryptocurrencies are becoming increasingly mainstream.
Blockchain
“Blockchain and digital currencies are not going away. I feel that this is only the start. Currencies come and go. Like smart phones and like the internet, I feel digital currencies will play a huge part in our lives. I feel we shouldn’t just disregard outright, accepting bitcoin payments,” he said.
It’s not the first time Mr Gilligan has sought to include bitcoin as a method of payment. Back in 2013 he brought forward a similar motion but it was disregarded at the time as being “premature”. However, if the council had accepted payment at this date, “for every € 1 we would have received, we would have approx. € 700 today” Mr Gilligan notes.
While awareness of cryptocurrencies such as bitcoin continues to increase, it is neither yet accepted as a legitimate currency nor does the Central Bank have any regulatory oversight over it.
There are also concerns about its volatility. On Monday, the European Supervisory Authorities (ESAs) for securities (ESMA), banking (EBA), and insurance and pensions (EIOPA) issued a release warning consumers of the risks in buying virtual or cryptocurrencies, and that there is a high risk they will lose all, or a large amount, or their money.
Risks
“An increasing number of consumers are buying virtual currencies unaware of the risks involved,” the authorities said, arguing that VCs such as bitcoin are subject to “extreme price volatility and have shown clear signs of a pricing bubble”.
Indeed the volatility of bitcoin will make it very difficult to be used as a currency for transactions. For example, the value of bitcoin rocketed last year from around € 1,000 in January to over € 16,000 by mid-December; but it plummeted thereafter, falling by almost 70 per cent to € 5,000 in early February. Of course this volatility could play into residents hands; a soaring bitcoin could make those burdensome property tax bills that little bit cheaper.
