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Currency free of government regulation: A libertarian’s dream and Bitcoin is the answer, some have said. But as the cryptocurrency gains popularity, so do levels of scrutiny.
It looks as if the unregulated Bitcoin market may have hit a snag lately as lawmakers take an interest in establishing some law and order.
Earlier this month a Texas judge ruled that Bitcoins are a currency and are therefore subject to government oversight.
In March the US Treasury issued a set of rules in an attempt to reign in the industry, ordering that Bitcoin business must register with the federal government and adhere to a regulatory regime as all other currencies do.
Now a US senate committee is investigating the coin and deciding how much of a role the state can and should play.
This week USA Today reported that the Senate Homeland Security and Government Affairs Committee has been questioning government agencies on how they oversee virtual currencies. Responses are due at the end of August.
But the cyrptocurrency community isn’t breaking a sweat. Patrick Murck, Bitcoin Foundation’s general counsel, told USA Today that he found the State’s actions “proactive” and conducive to “productive dialog.”
Meanwhile, the New York Department of Financial Services issued a series of subpoenas in August to Bitcoin businesses. The banking and insurance department wanted to know how the industry was protecting against money laundering and providing customers with protection.
Murck said New York was “trying to set the policy for the entire country,” adding that it is unlikely the state has any jurisdiction in the matter.
Skeptics point to several issues including anonymity, lack of regulation and potential use in black markets. Transactions are difficult to trace and the virtual money is not tied to any sort of bank or business.
The Bitcoin Foundation, a trade organization for the digital currency, has taken the issue head on by attending a meet-and-greet with lawmakers this past week, The Verge reports. The meeting was meant to be educational as Bitcoin representatives explained the technical side of their business to the Fed, the IRS, the FBI and the Department of Homeland Security, among others.
Currently, the Bitcoin camp is split between those who invite regulation and those who oppose it. In a recent interview with CATO Institute, Jerry Brito, senior research fellow at the Mercatus Center, said that whether or not the community supports government overisight is not the issue.
“The US government has anti money laundering laws and anti terrorism financing laws and they’re going to apply these laws,” he said.
See Brito’s full interview here:
5 Comments
Justus Ranvier
A more accurate statement would be, “The US government has anti money laundering laws and anti terrorism financing laws and they’re going to attempt to apply these laws.”.
Whether or not they will be more effective at enforcing those laws then the MPAA and RIAA were effective at stamping out P2P file sharing is an open question.
Guest
You are way behind news, bad news for you. The Bitcoin foundation has already met with US Feds, and as you post this “news” now, it’s not really “news” but rather old news I’ve read like a week ago. Enough
LAMB
So, some computer GEEK dreamt up this “new currency” and everyone BELIEVES IT EXISTS?? How dumb and gullible you are.
What is the value in REAL DOLLARS?? What are their RESERVES?? Does the BANK have a Head Office (or is it just some ‘computer location’??)
Just a figment of someone’s imagination, and people BELIEVE IT??.
How about this? “The CARAT COIN”, based on hypothetical Diamond reserves that dreamers have stored in their head and dreamt of in their dreams???
shoes
How does solving a math problem translate to value in any currency? Other than as part of a larger task, that is?
bitcoin has got to be the dumbest idea for currency yet. It is nothing more than a pyramid scheme where those on the ground floor will sell their highly “valuable” bitcoins for real money to someone who will try and turn around and do the same to some other sucker. Eventually some poor non-nerd will own many bitcoins that are nothing more than a novelty.
People are so gullible and this reminds me of ’99-2000 when dotcoms busted out and all the mining men were suddenly selling ideas in a .com instead of moose pasture in Nevada and other parts.
cory
oh i knew they were gonna use the word anti launder and anti terror to support there cause, i dont care if terrorists blow me up, and i dont care if my money is laundered out of my pockets… stop trying to protect me out of my FREEDOMS EXPENSE FOR FUCK SAKES