Stephen D. Palley, a partner at Anderson Kill, a Washington D.C.-based law firm, recently discussed how micropayments can be sent using Bitcoin (BTC), the world’s most dominant cryptocurrency.
Palley, who taught himself how to write computer programs at an early age, revealed that when he first began exploring the process of sending micropayments, the only way it could be done was by using PayPal and its “Mass Pay” API.
Cryptos Can Solve The Micropayments Problem
Palley, whose comments came during an airing of the Keiser Report on May 4, 2019, argued that “sometimes, [one of the] problems that crypto solves, depending on the transaction fees, is micropayments” as these can be processed a lot quicker on blockchain-based networks.
Going on to comment on the cryptocurrency regulatory landscape, Palley said that the initial coin offering (ICO) craze of 2017 allowed companies to raise millions of dollars in a very short period of time and also without having a product or even a proof of concept.
Raising Money In A Regulated Manner Using Experimental Technology
However, he pointed out:
The initial flurry of ICO [where you put together] a whitepaper, get a Slack or Discord channel, and you raise $5 million…that was six month to a year flash in the pan. That’s gone. I personally don’t understand the attraction of using experimental technology to raise money in a regulated fashion. It seems like you’re adding [an unnecessary] layer of complexity to it, but maybe there’s something there.
In response to a question about whether lawmakers to need to formulate an updated regulatory framework, which provides more clarity regarding how cryptocurrency transactions should be conducted, Palley remarked:
There are some areas where we could use greater regulatory clarity, [like] with the Bank Secrecy Act and how [it] applies to crypto-to-crypto transactions. And, how the Act applies to exchanges of assets between different [blockchains.] Some of the regulations don’t really make sense [when applied to cryptocurrencies.]
Elaborating on the actual process involved in converting a crypto-based token from one form to another (for example, from an ERC-20 token to BEP-2), Palley mentioned that it’s kind of like “converting a [Microsoft] Word document to a WordPerfect document.”
He added that it’s not entirely clear whether the Bank Secrecy Act (a law that requires financial institutions to comply with the government’s requests for financial disclosure in order to prevent illicit activities) should be applied in these types of scenarios.