Bitcoin, the decentralized virtual currency that approximates cash on the internet, had a big day today. The four-year-old currency had its first hearing in Congress as experts from the government, the Bitcoin community, and the nonprofit sector appeared to discuss the implications of the growing popularity of virtual currencies. And while that testimony took place, a single Bitcoin soared to $700 on the market at the tail of a two-week climb.
"Virtual currencies, perhaps most notably Bitcoin, have captured the imagination of some, struck fear among others, and confused the heck out of many of us," Sen. Tom Carper (D-DE), chairman of the Homeland Security and Governmental Affairs Committee, told a packed room.
The hearing was the culmination of a three-month investigation into Bitcoin and other virtual currencies, he said. The proceeding was made up of two panels. The first featured Jennifer Shasky Calvery, the director of the Financial Crimes Enforcement Network; Mythili Raman, an attorney with the U.S. Department of Justice; and Secret Service agent Edward W. Lowery III.
The hearing was the culmination of a three-month investigation into Bitcoin
The second panel included Ernie Allen, CEO of The International Centre for Missing & Exploited Children, who spoke about the use of virtual currencies to facilitate child pornography; Patrick Murck with the nonprofit Bitcoin Foundation; Jeremy Allaire, CEO of Circle, a digital currency startup; and Jerry Brito, a fellow with the Mercatus Center at George Mason University.
While the hearing was frontloaded with discussion of the potential for virtual currencies to be used for crime, there was no sense of alarm about the strange new world of Bitcoin. The government's representatives seemed confident that they have the tools to monitor and contain crime even when facilitated by Bitcoin or another virtual currency, citing the busts of eGold, Liberty Reserve, and the Silk Road.
Besides, as Raman said, "Cash is still probably the best medium for laundering money."
Today's hearing was inconclusive but it seems to indicate that regulatory agencies and legislators are more interested in controlling Bitcoin than regulating it. Calvery closed her testimony by strongly encouraging Bitcoin businesses to register with FINCEN.