> MtGox existed because it is nearly impossible to open an exchange in the US.

That's kind of orthogonal to the issue of whether bitcoin can be regulated (it can, but that has little do with why exchanges in the US are legally difficult.) An exchange that trades bitcoin for boring fiat currency has to manage and distribute funds from fiat currency accounts, and its US regulation of that activity that produces a significant compliance cost to running an exchange in the US.

Perhaps the very existence of a currency that cannot be regulated is worrying?

In what sense do you consider bitcoin to be a currency that "cannot be" regulated?

Do you mean that it cannot be regulated because there isn't an effective way for governments to exert control over how much of it is produced? I don't see that as being particularly worrying. No more so than foreign currencies are worrying... does Iceland worry that they cannot control the production of Argentine pesos?

Do you mean in the sense that businesses that use it cannot be regulated? Because that is obviously false. Of course businesses which use bitcoin can be regulated. Why couldn't they be? As VMG points out, the regulation of bitcoin businesses is not hypothetical; they are regulated.

Do you mean in the sense that bitcoins cannot be taxed? Because that is also obviously false. Here is how the IRS could tax bitcoin: "Attention American taxpayers: report your bitcoin shit, or we will nail you for tax evasion and send your ass to jail." How the hell do you think they tax all-cash businesses?

Bitcoin does not fundamentally change the game like many people seem to think it does.

In the first sense. Does the US worry that it can't directly control the production of renminbi? Absolutely.

Maybe they should not. I see absolutely no reason why you would find it worrying that they cannot. That's basically just being worried by the sovereignty of other nations; worried that you can't boss other people around... what a perverted concern.

If bitcoin is only worrying to the extent that foreign currencies are worrying, then I don't see what the big deal is. They cope with the existence of what, 179 foreign currencies right now (minus a few pegged to the dollar, but whatever)? They can learn to cope with 180.

Worrying to the OP - I find it enormously interesting.

And at least in the case of the US they can (and do) lean pretty hard on any of the other 179 governments when they really want to. There is no central Bitcoin bank to lean on. That's all I'm saying.