Wells Fargo gathers bank 'n' gov bigwigs to discuss Bitcoin 'rules'
State needs to 'regulate' it before we start making er, coin, from transacting with it
America's biggest bank, Wells Fargo, has called together finance execs, virtual currency experts and US government officials to talk about the "rules of engagement" when it comes to virtual money Bitcoin.
The bank's anti-money laundering chief, Jim Richards, has started a group to investigate potential Bitcoin services or banking arrangements the bank could offer to customers dealing in the digital cash, people familiar with the matter told the Financial Times.
Wells Fargo, which is the largest bank in the US by market value, is interested in the new e-currency economy but is unsure of regulators' views, considering that Bitcoin has been linked to money laundering.
Chief exec John Stumpf has also said that the bank's practice is to look into financial innovations.
“We have made enormous investments as a company and as an industry in a payments system that is secure, and we need to be sure we are up to speed with what other things are going on and their risks and rewards,” he said.
“We want to make sure we understand what it is, what it does and what it does not... The world is changing and will continue to change. Whether Bitcoin will be a big part of that, who knows?”
Regulators and governments are becoming more and more interested in what the Bitcoin economy is doing as the apparently faddish virtual money market stubbornly refuses to vanish without a trace, as many commentators originally expected it to. Instead, Bitcoin has been a constantly, if somewhat erratically, growing presence in currency markets, with high profile investors like the Winklevoss twins and venture capital firm Andreessen Horowitz sinking money into the virtual coins.
However, authorities have shown mixed reactions to a currency that's free from both central bank and government influence. The People's Bank of China has banned Bitcoin in the country and the European Banking Authority has warned that, among other risks, there aren't any regulatory protections in the EU for consumers if exchanges or other Bitcoin repositories go out of business.
On top of that, the crypto-currency has a reputation as an easy way for crooks to launder cash and pay for illicit transactions, precisely because of its position outside the system.
The Wells Fargo group was scheduled to meet in San Francisco yesterday to look at the security issues around Bitcoin and discuss ideas like establishing anti-money laundering principles for financial institutions to follow when dealing with virtual currency startups, the FT's familiar people said. ®