Watchdog: Y'know what Bitcoin really needs? A REGULATOR!
US derivatives commission mulls rules for e-cash
A US financial regulator has said it's figuring out if crypto-currency Bitcoin falls under its remit.
Top bods at the Commodity Futures Trading Commission (CFTC) are discussing whether the cyber-cash should actually be covered by its rules, as Bitcoin gains in popularity.
"[Bitcoin] is for sure something we need to explore," one of the five commissioners at the CFTC told the Financial Times.
"It’s not monopoly money we’re talking about here - real people can have real risk in these instruments, and we need to ensure that we protect markets and consumers, even in what at first blush appear to be ‘out there’ transactions," he said.
A person familiar with the commission's chats on the online currency said it was "seriously" looking into Bitcoins.
It's not the first time that governments and regulators have made noises about stepping into the Bitcoin market, which is starting to be seen as an attractive alternative to more traditional investments because the currency is not under the control of any central bank or government, as traditional currencies are.
Bitcoin transactions are also difficult for governments to levy taxes upon as the currency does not operate through traditional banking channels, relying instead upon a combination of algorithms and cryptography.
The US Treasury said in March that any firms that deal in the virtual money would be considered "money services businesses" just like any other, requiring them to provide information to the government and implement policies to stop money laundering.
The CFTC usually monitors derivatives contracts rather than cash markets, so it may not be the right body to oversee all Bitcoin transactions. Any leveraged deals that were not settled within two days would fall under the commission's jurisdiction, the source said.
"In essence, we’re talking about a type of shadow currency, and there is more than a colourable argument to be made that derivative products relating to Bitcoin fall squarely in our jurisdiction," Chilton said. ®