A Senate committee has begun sending letters to a number of federal agencies in order to determine how Bitcoin and other virtual currencies may be overseen and perhaps regulated in the future, Politico reported.
Making note of the fact that digital currencies such as Bitcoin have recently caught the attention of business and finance communities, law enforcement, and the federal government, the Senate committee is looking into “the threats and risks related to virtual currency – and also the promise it holds in some areas.”
Penned by Senator Thomas R. Carper and Senator Tom A. Coburn of the Senate Homeland Security and Government Affairs Committee, the letter is addressed to Janet Napolitano, Secreatry of the U.S. Department of Homeland Security (DHS). Additional offices within the DHS will also receive inquiries from the committee in coming days, according to the letter.
Specifically, the letter requests that the committee be made aware of any policies and procedures being considered in relation to regulation of virtual currency, whether any agencies have coordinated with state or local governments as it pertains to possible regulation, and if any strategies or plans have been developed or established to oversee virtual currencies.
The letter requests that the necessary information be provided no later than August 30, 2013. Although no date has been set, it is likely that the committee will hold a hearing on the matter after analyzing the data received.
Senators Carper and Coburn cite several concerns with Bitcoin and virtual currencies such as the ability to send the currency anonymously without leaving a trail, the speed at which such transactions can occur, and the likelihood that criminals are using digital currency as a way to launder money.
The letter also makes mention of the recent case in Texas where an individual was charged by the Securities and Exchange Commission with running a Bitcoin Ponzi scheme. As reported on that case here at PokerUpdate, a U.S. judge ruled that Bitcoin can indeed be classified as a currency. The letter points out that this is likely not the last such case involving fraudulent behavior and Bitcoin.
Although the U.S. government’s scrutiny of Bitcoin may be seen as detrimental by many Bitcoin investors, the Senate committee’s letter seemingly shows an open mind about the possible benefits of digital technology. Intent on making sure “that potential threats and risks are dealt with swiftly,” the committee also is making inquiries in order to “ensure that rush or uninformed actions don’t stifle a potentially valuable technology.”