Bitcoin Foundation Tries Building Dialogue With Federal Regulators

With interest in and scrutiny of virtual currency at a high, the Bitcoin Foundation hopes to improve the industry's standing with regulators and members of Congress through communication and cooperation.

The concept of virtual currency, particularly the popular Bitcoin, takes a little time for people—and the federal government—to wrap their heads around.

But the Bitcoin Foundation, itself the target of regulatory scrutiny at the state level, is working to build relationships with federal regulators—something that might come in handy as the virtual currency becomes more established with the public. More details:

The problem: Bitcoin, which has received a lot of media hype in recent months, has a bit of a perception problem. Its anonymous nature has led to its use in the illegal drug trade and gambling, and some public entities worry the virtual currency could defraud investors and the public alike. The Bitcoin Foundation, which was founded to “promote, protect, and standardize the Bitcoin protocol” but does no exchanging of money itself, found itself in these murky waters this year after the state of California raised concerns that the organization was engaging in unlicensed money transmission. The foundation denies the charges, which it says come from a fundamental misunderstanding of how the currency works.

An opportunity for dialogue: On Monday, the Bitcoin Foundation was scheduled to meet with representatives from seven federal agencies—including the Internal Revenue Service, Federal Reserve, Treasury Department, Office of the Comptroller of the Currency, Federal Deposit Insurance Corp., the FBI, and the Secret Service. The goal: to help them better understand the digital currency and to provide information on the industry’s efforts. “We understand there are specific challenges that go along with Bitcoin and there is a lot of potential and we want to work with them to chart a safe course,” Patrick Murck, general counsel for the foundation, told The Wall Street Journal.

The group seeks to encourage cooperation between the industry and the federal government. “Our hope is that this is the beginning of an open and transparent dialogue between good-faith stakeholders to find common ground and develop public-private partnerships,” Murck told the virtual-currency news outlet CoinDesk.

This isn’t the only such meeting that the foundation has set up for this week—on Tuesday, its representatives are set to meet with congressional staffers.

(photo by btckeychain/Flickr)

Ernie Smith

By Ernie Smith

Ernie Smith is a former senior editor for Associations Now. MORE

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