Bitcoin: Regulators and States Out Ahead—Will Congress Follow?

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Bitcoin, a decentralized digital currency that facilitates quick exchanges of value, has received steady attention from the media and industry stakeholders. Akin to gold, bitcoins are mined using computers to solve increasingly complex equations and can also be bought on exchanges and transferred directly as a means of payment. As a digital and virtual currency, Bitcoin value is not currently tied to an existing currency standard or regulated by a single entity. Bitcoin has been plagued by controversy — ranging from skepticism over the actual value of a wholly virtual currency, to legal concerns following the shutdown of the Silk Road black market, to the mystery of the hacked and stolen bitcoins from the Mt. Gox exchange. With Bitcoin likely here to stay, federal regulators and states have begun devising schemes under which they can be exchanged and spent safely and securely—but will Congress follow their lead?

Congress Taking Increased Notice -

The Senate Homeland Security and Government Affairs Committee (HSGAC), led by Chairman Tom Carper (D-DE), has been out front on the issue—holding a hearing in November on the potential promise and threats of virtual currency, and facilitating a report by the Law Library of Congress on treatment and regulation of bitcoins in select international banking jurisdictions. The Senate Banking, Housing, and Urban Affairs Committee also held a joint subcommittee hearing, mainly focused on how regulators are interacting with virtual currencies to mitigate risk and illicit activity.

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Topics:  Bitcoins, Virtual Currency

Published In: Criminal Law Updates, Elections & Politics Updates, Finance & Banking Updates, Science, Computers & Technology Updates, Securities Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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