California officials said they have decided against regulating digital currencies such as Bitcoin under existing rules and instead will ask the legislature to take up the issue.
After concluding in December that regulators had legal authority over Bitcoin, the California Department of Business Oversight has decided not to exercise it, spokesman Tom Dresslar said.
The question of how and whether to regulate Bitcoin has confounded regulators around the world since it emerged in software form in 2009 from a paper authored by an anonymous computer scientist. Bitcoin proponents and some financial regulators say the digital currency is an important innovation that makes payments easier and cheaper.
“It remains to be seen whether Bitcoin and the virtual currency industry will fulfill the growth prospects forecast by backers,” Dresslar said by e-mail. “Prudence dictates we take a deliberate approach and let the market further develop. That will better ensure any regulatory regime California ultimately adopts works effectively for consumers, businesses and the market.”
The Bitcoin Foundation, a Washington-based nonprofit advocating for the virtual currency, didn’t immediately respond to an e-mail message seeking comment.
About 60,000 U.S. businesses accept Bitcoin as currency, and it’s used in more than 100,000 transactions a day, according to the foundation.
New York granted its first charter to a commercial Bitcoin exchange earlier this month, according to a press release from Benjamin Lawsky, the state’s superintendent of financial services. In March, Lawsky said his department was exploring regulations on virtual currencies.