California Claims It Is Rightful to Regulate Bitcoin under Existing Law

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California Claims It Is Rightful to Regulate Bitcoin under Existing Law

Bitcoin has been facing on and off relationship with California lawmakers and officials. Once they banned the digital currency and then lifted the ban. Now, they have again started their rant that they have authority under the existing law to regulate the digital currency and in fact, they are mulling a plan to envisage regulations.

In a communication, officials are considering whether to regulate digital currencies such as Bitcoin or not as staff at California’s Department of Business Oversight have determined that the state’s law governing money transmitters, which until now has been used to regulate businesses such as Western Union Co., may also apply to digital currencies.

The law governing money transmitters authorizes the agency to regulate units of money that are created and exchanged independent of central banks. Talking to media professionals Tom Dresslar, a spokesman for the department, said that the consensus among staff is that the department and commissioner could regulate virtual currency.

He admitted that even the current state law permits them to regulate the digital currency and according to him consumers would be the prime concern of any regulatory structure they build. Thus, he says that making sure they are fully aware of the risks associated with virtual currency and providing effective, reasonable safeguards against those risks, they can be regulated.

A lot of Bitcoin supporters in the country have been showing their concerns regarding the attempts by the US authorities to regulate Bitcoin, essentially a digital currency that is not regulated by any agency of any sort. In fact, the question of how and whether to regulate Bitcoin has confounded regulators around the world since it emerged in software form in 2009.

Bitcoin Was Once Banned in California

A lot of governments around the world have either banned Bitcoin or do not recognize it at all. Some even consider Bitcoin as commodity. Nonetheless, Bitcoin proponents and some financial regulators say the digital currency is an important innovation that makes payments easier and cheaper and thus, it should not be regulated.

A lot of investments have been coming to various Bitcoin startups working as exchanges, Bitcoin mining machines, Bitcoin wallets, etc. Several venture capitalists in Silicon Valley (BSVX) and elsewhere have invested hundreds of millions of dollars into digital-currency in various new and established Bitcoin companies.

Nevertheless, several Bitcoin frauds too have maligned the Bitcoin ecosystem; one was Silk Road, another was Mt. Gox. However, the digital currency has been able to reach to new people and still trading above $350, and even reached above $1200 in October last year.

To contact the reporter of this story: Deepak Tiwari at deepak@forexminute.com