Senate committees to hold hearings about virtual currency

Two senate committees are expected to convene soon regarding possible regulatory issues related to decentralized electronic currencies such as bitcoin.

Congressional aide sources inside the Senate told the Wall Street Journal that members of government and representatives from the private sector are expected to testify during the hearings. No dates have been set, but the hearings are expected to occur within the next few weeks.

"The Bitcoin Foundation thinks these upcoming hearings are good for consumers and others as education on bitcoin is important," Jinyoung Englund, the foundation's director of public affairs, told CoinDesk. She added:

"Understanding the unique possibilities and challenges of virtual currency in general, and bitcoin specifically, is important to the process of writing regulatory policy.

As a foundation, we welcome opportunities to educate and dispel myths on bitcoin to legislators, regulators and the public."

On 12th August, senators Tom Coburn and Thomas Carper sent a letter to Janet Napolitano, the secretary of homeland security, seeking guidance on virtual currencies.

"Our committee staff has been interviewing individuals inside and outside of government regarding the threats and risks related to virtual currency - and also the promise it holds in some areas," the letter states.

"The expansive nature of this emerging technology demands a holistic and whole-government approach in order to understand and provide a sensible regulatory framework for their existence."

In August, the Financial Crimes Enforcement Network (FinCEN) hosted a conference at the US Treasury to discuss distributed finance issues.

Representatives from the Internal Revenue Service the Drug Enforcement Agency and the Federal Bureau of Investigation (FBI), among other government entities, were in attendance.

The news of multiple senate hearings on virtual currencies comes at a time of high bitcoin valuations. The current price of bitcoin has reached a level not seen since last April, when the price hit $266 per coin on one exchange.

Andrew Beal, a lawyer who focuses on helping businesses with federal and state securities compliance as part of the firm Crowley Strategy, says these hearings will only help government better understand bitcoin.

"The legal and regulatory foundation for virtual currencies will be laid over the next few years; these hearings are an opportunity to ensure that lawmakersare getting the right information from the right people," he said.

Englund, expressed optimism that representatives from the bitcoin industry would be involved. "It would certainly enrich the hearing to invite bitcoin experts from academia, venture capitalists and entrepreneurs of bitcoin companies."

She said it's a first step towards literacy and understanding, adding: "As the first congressional hearings on bitcoin, we expect this to be more introductory and educational in nature."