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Are the US agencies siding with Bitcoin? Authorities say cryptocurrency offers “legitimate benefits”

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An hearing happening this Monday (18) in Washington DC might bring good news to the Bitcoin ecosystem: according to Bloomberg, the United States Department of Justice and the SEC (Securities and Exchange Commission) are telling a Senate committee that Bitcoins are legitimate financial instruments, potentially boosting the wider acceptance of cryptocurrency.

The meeting, entitled “Beyond Silk Road: potential risks, threats, and promises of virtual currencies”, is taking place in the room 342 of the Dirksen Senate Office Building and gathers representatives from some US law enforcement agencies and the Bitcoin Foundation.

Bloomberg reports the committee scheduled the hearing “to explore potential promises and risks related to virtual currency for the federal government and society at large” after Silk Road was shut down in October. In a letter, Peter Kadzik, principal deputy assistant attorney general, wrote the following message:

The FBI’s approach to virtual currencies is guided by a recognition that online payment systems, both centralized and decentralized, offer legitimate financial services. Like any financial service, virtual currency systems of either type can be exploited by malicious actors, but centralized and decentralized online payment systems can vary significantly in the types and degrees of illicit financial risk they pose.

Also present at the hearing is Ben Bernanke, chairman of the Federal Reserve, who has also revealed that the authority has no plans to regulate cryptocurrency.

“Although the Federal Reserve generally monitors developments in virtual currencies and other payments system innovations, it does not necessarily have authority to directly supervise or regulate these innovations or the entities that provide them to the market”, the expert wrote in a letter to the committee.

Jerry Brito, a senior research at the Mercatus Center, from the George Mason University, is also testifying in front of the committee this Monday. He states that these hearings can portray the idea that Bitcoins are an acceptable alternate means of conducting transactions. So, their use can only increase: “these hearings means Bitcoin is finally coming into its own; it’s a real thing and it’s not going anywhere”.

Maria is an experienced journalist currently living in the UK. She has been writing about Bitcoin and the altcoin universe since 2013. She is also a member of the Lifeboat Foundation's New Money Systems Board and a big cryptocurrency supporter.

View all Posts by Maria Santos

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