Last updated on April 17th, 2014 at 06:14 pm
Bitcoin is gaining a lot of friends in high places, whether it’s being lauded for its innovative technology or as an investment vehicle. The digital currency is taking one step closer to full-blown legitimacy in the economy.
Raj Date, former deputy director of the United States Consumer Financial Protection Bureau (CFPB), told CNBC on Wednesday that he is investing in bitcoin. He told the business news network that he is quite bullish on the cryptocurrency.
“The things I like about innovation in consumer finance, like bitcoin, like digital currency, is the exact reason I went to the Consumer Financial Protection Bureau,” he said. “How is it that you can take new ideas and make the system work better for people?”
Date would further present the case that bitcoin might not be the only successful digital currency in the marketplace today, but he believes that if there is any tool out there that can assist in aiding both the consumers and merchants then it’s a positive innovation for everyone.
However, he commented on a matter that has become one of the fiercest debatable topics in the bitcoin community: should the virtual currency be regulated by the government? “Absolutely,” says the former CFPB official, who is now managing director of Fenway Summer, an advisory and investment firm based in Washington, D.C.
“The potential for digital currency to really make an impact in peoples’ lives is if payments can be cheaper, easier, faster and more secure,” he added. “But having a steady and clear set of regulatory apparatus around it will make things better, not worse.”
In the future, bitcoin will become an integral part of the financial community, he argued.
“The new firms in this marketplace are considerably more serious-minded, considerably better financed, and take [security]seriously,” noted the board member of Circle Internet Financial, a start-up in the state of Massachusetts.
The peer-to-peer decentralized digital currency has been garnering tremendous momentum on Wall Street this year. The latest proponent of bitcoin is Jeff Clavier, a managing partner of venture-capital firm SoftTech VC, who told the Wall Street Journal on Thursday that there is no need to immediately put your entire life savings on bitcoin because private firms are working to establish a safe and secure environment.
“If it’s really as transformative and big as people have been talking about, there will be extremely valuable companies built over the next few years,” he said. “So you don’t need to rush and put all your chips on the table.”
We reported this week of how Fred Wilson, co-founder of Union Square Ventures, made the comparison between the Internet and bitcoin and the digital currency would be a great long-term investment.
“I guess we were interested in Bitcoin for a long time and Coinbase was the first company we saw that was built on top of Bitcoin that we thought was a good investment. It’s turned out to be a great investment,” stated Wilson. “The fundamentals of the business are great in terms of their revenues and their users. They have over a million hosted wallets now — that’s like a million bank accounts basically — which is amazing. It’s a million people.”
At the time of this writing, bitcoin is trading at just under $500.