In Senate hearings Monday and Tuesday, an all-star roster of conscientious public servants — from the Treasury Department, Justice Department, Secret Service, Federal Reserve, Homeland Security, Securities and Exchange Commission and so on — all offered very respectful remarks about virtual currencies and their innovative potential.
Yet a common theme they all expressed was that such currencies were something they’ll be able to control — something that can be monitored and policed — and not an anarchic and impenetrable system that drug dealers and money launderers and tax evaders can hide behind. So: The feds are paying attention.
For future users of virtual currencies, that’s a good thing. It’ll offer consumer protections and predictability. For Bitcoin, it’s a problem.
To the extent using Bitcoin has any benefits now — convenience, cost-efficiency, putative anonymity — it’s because authorities haven’t been taking it very seriously. As officialdom becomes more assertive, Bitcoin will become more difficult and expensive to use, and less anonymous.
Eulogy made by Timothy Lavin