Submission + - DOJ, SEC Call Bitcoins "Legitimate Instruments" (bloomberg.com)
SonicSpike writes: The Department of Justice said Bitcoins can be “legal means of exchange” at a U.S. Senate committee hearing, boosting prospects for wider acceptance of the virtual currency. “We all recognize that virtual currencies, in and of themselves, are not illegal,” Mythili Raman, acting assistant attorney general at the Justice Department’s criminal division, said at the hearing.
The Committee on Homeland Security and Governmental Affairs, which solicited comments in an Aug. 12 letter, scheduled the hearing “to explore potential promises and risks related to virtual currency for the federal government and society at large” after the Silk Road Hidden Website was shut down in October. The closing of the marketplace, is helping fuel a rally in the virtual currency as speculators bet that the digital money will gain more mainstream acceptance.
“The FBI’s approach to virtual currencies is guided by a recognition that online payment systems, both centralized and decentralized, offer legitimate financial services,” Peter Kadzik, principal deputy assistant attorney general, wrote in a letter dated Oct. 23. “Like any financial service, virtual currency systems of either type can be exploited by malicious actors, but centralized and decentralized online payment systems can vary significantly in the types and degrees of illicit financial risk they pose.”
Ben Bernanke, chairman of the Federal Reserve, is also weighing in on the hearing, saying that it has no plans to regulate the currency. “Although the Federal Reserve generally monitors developments in virtual currencies and other payments system innovations, it does not necessarily have authority to directly supervise or regulate these innovations or the entities that provide them to the market,” Bernanke wrote in a letter to the committee ahead of the meeting. Quartz's Zachary Seward called it a "cautious blessing," with Bernanke acknowledging the Fed doesn't have the authority to supervise virtual currencies, but that they "may hold long-term promise, particularly if the innovations promote a faster, more secure and more efficient payment system.”
The hearings will bolster the view that Bitcoins are an acceptable alternate means of conducting transactions, and that their use will grow, said Jerry Brito senior research fellow at the Mercatus Center at George Mason University who is also testifying in front of the committee today. “These hearings means Bitcoin is finally coming into its own; it’s a real thing and it’s not going anywhere and these hearings highlight that."
The Committee on Homeland Security and Governmental Affairs, which solicited comments in an Aug. 12 letter, scheduled the hearing “to explore potential promises and risks related to virtual currency for the federal government and society at large” after the Silk Road Hidden Website was shut down in October. The closing of the marketplace, is helping fuel a rally in the virtual currency as speculators bet that the digital money will gain more mainstream acceptance.
“The FBI’s approach to virtual currencies is guided by a recognition that online payment systems, both centralized and decentralized, offer legitimate financial services,” Peter Kadzik, principal deputy assistant attorney general, wrote in a letter dated Oct. 23. “Like any financial service, virtual currency systems of either type can be exploited by malicious actors, but centralized and decentralized online payment systems can vary significantly in the types and degrees of illicit financial risk they pose.”
Ben Bernanke, chairman of the Federal Reserve, is also weighing in on the hearing, saying that it has no plans to regulate the currency. “Although the Federal Reserve generally monitors developments in virtual currencies and other payments system innovations, it does not necessarily have authority to directly supervise or regulate these innovations or the entities that provide them to the market,” Bernanke wrote in a letter to the committee ahead of the meeting. Quartz's Zachary Seward called it a "cautious blessing," with Bernanke acknowledging the Fed doesn't have the authority to supervise virtual currencies, but that they "may hold long-term promise, particularly if the innovations promote a faster, more secure and more efficient payment system.”
The hearings will bolster the view that Bitcoins are an acceptable alternate means of conducting transactions, and that their use will grow, said Jerry Brito senior research fellow at the Mercatus Center at George Mason University who is also testifying in front of the committee today. “These hearings means Bitcoin is finally coming into its own; it’s a real thing and it’s not going anywhere and these hearings highlight that."