US Regulators to Write the World’s First Bitcoin Rules

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US Regulators to Write the World’s First Bitcoin Rules

The US has in place a task force consisting of state regulators to draft the first bitcoin regulations to protect users of the digital currency while not hurting the rapidly growing technology.

Several US firms are involved in businesses that facilitate the purchase of goods and services using internet currencies. Bitcoin is not regulated by federal authorities, paving way for the creation of a maze of regulations at states level.

“We may be looking at some type of model definitions, or model laws or regulations, and very likely recommendations to either our federal colleagues or to Congress,” Reuters quote Massachusetts Commissioner of Banks David Cotney as saying.

Cotney is the head of the Emerging Payments Task Force, which is constituted by nine members of the Conference of State Bank Supervisors (CSBC). The task force expects to wind up its job within a year, he added.

Cotney said the task force aimed at figuring out the parties to put under regulations and which ones did not need oversight.

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Bitcoin is the most popular of digital currencies generated via computer software and is regulated by the Bitcoin Foundation. No government authority so far regulates the virtual currency. Some stores will take payments in bitcoins, offline or online.

Yet, recent glitches have attracted more bitcoin scrutiny. Mt. Gox, a bitcoin exchange based in Tokyo, sought bankruptcy protection after it announced the theft of bitcoins worth around $650 that belonged to customers.

State regulators say they don’t intend to stifle bitcoin-based businesses at local level but want to ensure users of the virtual currency are protected.

New York Superintended of Financial Services, who is also a member of the newly formed task force Benjamin Lawksy said his department was pursuing a bitcoin permit dubbed BitLicense, which according to NEWSBTC, will form a model if successful. California is also seeking a similar authorization.

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