State regulators to tackle bitcoin, virtual currencies

A top Senate Democrat is praising a group of state financial regulators for establishing a task force to monitor bitcoin and other virtual currencies.

Sen. Tom Carper (D-Del.) on Friday called the move by the Conference of State Bank Supervisors an “important step” toward protecting the financial markets from the influence of virtual currencies and other types of emerging payment systems that are not controlled by a government.

{mosads}”As virtual currencies, like bitcoin, and similar technologies continue to be increasingly utilized, we have to ensure that governments are adequately protecting consumers and addressing lawbreakers without hindering innovation,” said Carper, chairman of the Senate Homeland Security Committee.

Bitcoin has received mixed reactions from federal regulators and lawmakers on Capitol Hill, who have expressed concerns that criminals could manipulate the system to do everything from pay for illegal activities like murder to avoid paying taxes. But many of those same lawmakers want to be careful not to stifle innovation in cases where the users of virtual currencies are following the law. 

To address these concerns, the Conference of State Bank Supervisors announced this week that it is forming the Emerging Payments Task Force to coordinate new virtual currency standards between state regulators. 

The task force said it will look for ways to connect the “emerging payments landscape to the financial regulatory fabric.”

The task force will study changes brought on by virtual payment systems and determine how they impact consumers and whether they follow the law. The group will speak with federal and state regulators, industry groups and other experts as it considers new standards for virtual currencies.

Massachusetts Banking Commissioner David Cotney will lead the task force. Other members will include banking commissioners and supervisors from California, Florida, Georgia, New York, Tennessee, Texas, Utah, and Washington state.

“We seek an environment where technological innovation can be developed, but also regulated in a clear manner,” said Charles Vice, chairman of the Conference of State Bank Supervisors.