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US Government Embraces Bitcoin in Hearing on Virtual Currency
Daniel_Stuckey writes "Congress held its first-ever hearing on virtual currencies this afternoon, and it may have been the best PR boost bitcoin's had yet. The tone at the hearing held before the Senate Homeland Security and Government Affairs Committee was overwhelmingly positive as the panel weighed the risks of the technology that grew out of the criminal underbelly of the web, with the potential economic value of the now-booming futurist money. The prevailing sentiment over the two-hour deep dive into the pros and cons of the digital coins boils down to this: We need to uphold America's position as center of technical innovation by welcoming the new currency—but that that can't be done without government safeguards and regulations."
SonicSpike wrote in with a link to another report in Bloomberg. The Federal Reserve has no plans to regulate Bitcoin (lacking regulatory authority), but the SEC chair wrote "Regardless of whether an underlying virtual currency is itself a security, interests issued by entities owning virtual currencies or providing returns based on assets such as virtual currencies likely would be securities and therefore subject to our regulation."
From watching a bit of the C-SPAN coverage, I found it interesting to note that several of the witnesses from law enforcement effectively stated that:
1.) Current regulations had not hampered their ability to pursue criminals
2.) They saw more danger from centralized currency systems based in fringe countries than from "decentralized currencies such as Bitcoin"
A few really simple reasons the government would be in favor of Bitcoin:
1) Gain control early.
2) Every transaction leaves a trace. The idea that Bitcoin is anonymous is a bit of bullshit. Yes, right now the exchanges keep one hand from knowing the other. This is easily changed.
3) In aggregate, it's impossible to trace for a non-government entity. This means slush fund spending woohoo time.
4) Politicians have figured out that the extreme anti-social end of the internet from which Bitcoin has gained its popularity are a bunch of socially inept jack offs. They know these people have poor impulse control and too much intellect, but are easily swayed by marginal amounts of lip service.
I guess I missed the happy, joyous part then. I watched the first hour and 20-some-odd minutes of this hearing, and if I had taken a drink every time they said "child pornography", I would be in the hospital now.