David Cotney, Massachusetts Commissioner of Banks, says that a task force of US state regulators is working on the first Bitcoin rule-book. It is aimed at providing protection to people from fraud when they are using virtual currency. He thinks that protection of the Bitcoin users from fraud without smothering the fledgling technology is what his team is looking for.
As the number of companies and people has gone up in the US who enables customers to pay for goods and services in virtual currencies, the requirement for such guidelines and regulations has gone up as well. However, as Bitcoins are not regulated by the federal government, users face a maze of rules in the 50 states.
According to David Cotney his team 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. Several instances wherein the Bitcoin users have been duped have generated a concern among the regulators.
However, as has been admitted earlier by several regulators Bitcoin could be regulated as a commodity if market volatility continues, the measures on the part of the team led by David Cotney, may consider it important.
More Regulation Required
The opinions regarding more regulations came in when a subcommittee hearing organized by the Senate Committee on Banking, Housing, and Urban Affairs, was being held. A representative from a financial industry technology round table called for more regulation for virtual currencies as according to her it is required for the protection of the users.
Sharing her opinion Sarah Jane Hughes, university scholar and fellow in commercial law at Indiana University Maurer School of Law, says that Bitcoin may need to be regulated as a commodity or security, based on its market behavior. Noteworthy point is that several governments around the world have warned Bitcoin users about the risks involved.
David Cotney who was appointed in February to head the new Emerging Payments Task Force, a group of nine members of the Conference of State Bank Supervisors (CSBS) had then said that the task force had given itself roughly a year to complete the task.
The major task given to David Cotney was to get a clearer definition of which operators needed to be regulated and which ones did not. His group was also observing other new payment technologies, such as mobile phone payments, and PayPal.
To contact the reporter of this story: Deepak Tiwari at email@example.com