19 Nov 2013 / NYT – The virtual currency bitcoin took a big step toward the mainstream on Monday as federal authorities signaled their willingness to accept it as a legitimate payment alternative.
A number of federal officials told a Senate hearing that such financial networks offered real benefits for the financial system even as they acknowledged that new forms of digital money had provided avenues for money laundering and illegal activity.
PC: Jacquelyn Martin/Associated Press“There are plenty of opportunities for digital currencies to operate within existing laws and regulations,” said Edward Lowery, a special agent with the Secret Service, which is tasked with protecting the integrity of the dollar.
Signs that the government would not stand in the way of bitcoin’s development, even as it has been cracking down on criminal networks that use the digital money, stoked a strong rally in the price of the crypto-currency.
By Monday evening, the value of a bitcoin unit soared past $700 on some exchanges. The total outstanding pool of bitcoin — which is created by a network of users who solve complex mathematical problems — is now worth more than $7 billion.
The Senate hearing Monday afternoon was the clearest indication yet of the government’s desire to grapple with the consequences of this growth, and the recognition that bitcoin and other similar networks could become more lasting and significant parts of the financial landscape.
“The decision to bring virtual currency within the scope of our regulatory framework should be viewed by those who respect and obey the basic rule of law as a positive development for this sector,” said Jennifer Shasky Calvery, the director of the Treasury Department’s Financial Crimes Enforcement Network. “It recognizes the innovation virtual currencies provide, and the benefits they might offer.” …… Read more
