Jack Lew hints coming bitcoin regulations at World Economic Forum

Dozens of countries and central banks have weighed in on the issue of bitcoin. From China enforcing strict regulations to Canada classifying it as a taxable commodity, it seems a significant number of states have made clear the rules when it comes to owning the digital currency.

The nation that still remains to officially comment is the United States. Although exiting Federal Reserve Chairman Ben Bernanke briefly remarked on the cryptocurrency in a letter to Congress, it still remains to be seen if the federal government or the Fed will take actions to curb bitcoin’s immense popularity.

Speaking in Davos, Switzerland at the 2014 World Economic Forum, U.S. Treasury Secretary Jack Lew said the government still needs more time to assess bitcoin to confirm that the virtual currency isn’t be utilized for illegal transactions. Lew noted that he has discussed the matter with Jamie Dimon, JPMorgan Chase CEO, and they both share a “certain incredulity” regarding the alternative currency.

“We have to make sure it does not become an avenue to funding illegal activities or to funding activities that have malign purposes like terrorist activities,” Lew told CNBC on Thursday. “It is an anonymous form of transaction and it offers places for people to hide.”

He added that the Treasury has “made it clear through enforcement actions that we will look at these forms of transaction and we will enforce all of the rules we have on illegal money activity.”

So far, the only governmental body to impose any sort of regulations is New York’s Department of Financial Services (NYDFS). Later this month, the department will be holding public hearings to discuss the digital currency. The current proposal being talked about is a BitLicense, a licensing requirement for all businesses dealing with bitcoin and other digital currencies.

“We believe that—for a number of reasons—putting in place appropriate regulatory safeguards for virtual currencies will be beneficial to the long-term strength of the virtual-currency industry,” department superintendent Benjamin Lewsky stated in a memo this past summer. “If virtual currencies remain a virtual Wild West for narcotraffickers and other criminals, that would not only threaten our country’s national security, but also the very existence of the virtual currency industry as a legitimate business enterprise.”

At the time of this writing, bitcoin is trading just above $800.

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Comments

  1. Dennis.Orlikowski says:

    For his next trick, JL will regulate ghost’s and goblins. When he’s finishished, Mr. Lew will have regulated Jack.

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