Bitcoin at Record, Senate Seeks to Discuss Virtual MoneyOlga Kharif and Max Raskin
The U.S. Senate Committee on Homeland Security and Governmental Affairs will meet on Nov. 18 “to explore potential promises and risks related to virtual currency for the federal government and society at large,” it said in a statement today.
The price of Bitcoins has more than doubled even after the closing five weeks ago of the “Silk Road Hidden Website,” where people could obtain drugs, guns and other illicit goods using Bitcoins. While the digital money lost a third of its value in the days after the website was shut down, it’s becoming an increasingly popular way of paying for goods and services on the Web and in stores that accept the tender.
“Bitcoin is obviously getting a lot of attention from the federal government on the regulatory side,” Nicholas Colas, an analyst at ConvergEx Group, said in an interview. “Given the involvement of the currency in illegal activities, that is entirely warranted. I expect these hearings to be largely informational, which is good for Bitcoin.”
The hearing, titled “Beyond Silk Road: Potential Risks, Threats, and Promises of Virtual Currencies,” will invite witnesses to testify about the challenges facing law enforcement and regulatory agencies, and include views from “non-governmental entities who can discuss the promises of virtual currency for the American and global economies.”
Bitcoin reached a record on BitStamp, one of the more active Web-based exchanges where the digital money is traded for dollars, euros and other currencies. Bitcoins were trading at $323 apiece at 12:36 p.m. in New York.
The virtual currency exists as software that’s designed to be untraceable, making it an attractive tender for those seeking to trade anonymously via the Web. There are about 30 transactions per minute, at an average amount of 16 Bitcoins, according to a report this week by the Federal Reserve Bank of Chicago.
“The architecture of the system is elegant from a computer-science perspective, but hard for a non-tech person to understand,” Colas said. “Getting industry professionals to close this gap will be very helpful.”