Wednesday, July 30, 2014

As Businesses Boom, States Must Decide How to Regulate Bitcoin


With its penchant for seesawing values and off-putting headlines, Bitcoin has drawn mixed reactions from local governments so far. In the US, only four states have taken an official stance on virtual currency, and they're split right down the middle.

There’s New York of course, which made waves last week as the first state to propose a regulatory framework for Bitcoin, dubbed “BitLicense.” The proposed rules outline how businesses based in the state can and can't use virtual currency. 

Over on the West Coast, California first banned cryptocurrency completely, and then flip-flopped. Governor Jerry Brown signed in new legislation last month to allow alternative currencies in the state. “Here in California, we’re interested in being innovative and cutting-edge,” said the legislation's sponsor, according to a new Pew report on digital currencies. 

Meanwhile, state banks in Texas and Kansas recently elected to treat the digital coins as property rather than currency.

A chasm is emerging on the federal level too. On Tuesday evening, a trio of Bitcoin-freindly congressmen will host a Bitcoin Demo event on Capitol Hill, where lawmakers will have an opportunity to talk to industry experts and brush up on their cryptocurrency knowledge. Looking back just a couple years ago, this kind of interest from the political top brass would have been unthinkable for the controversial technology.

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