Reuters: Regulatory News: U.S. regulator mulls setting rules for digital currency Bitcoin

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U.S. regulator mulls setting rules for digital currency Bitcoin May 6th 2013, 22:24 By Douwe Miedema WASHINGTON | Mon May 6, 2013 6:24pm EDT WASHINGTON May 6 (Reuters) - The top U.S. derivatives regulator is considering whether the Bitcoin virtual currency should be subject to its rules, a top official at the agency said. Bart Chilton, one of five commissioners at the Commodity Futures Trading Commission, said he had asked staff to explore whether consumers needed more protection from any mishaps with Bitcoin, whose value collapsed last month. "Here's what I know for sure: we could regulate it if we wanted. That is very clear," Chilton told Reuters in an interview on Monday. The Financial Times was first to report on Chilton's plans. Bitcoin, a digital currency that can be moved via computer or smartphone without a financial intermediary, has gained in prominence as people start to question the safety of holding their cash in the bank. It shot up in value in March, when investors took fright at the next turn of the euro zone debt crisis. But the price of one "coin" plunged to $130 from a record high of $260 on April 10. The CFTC's remit has been vastly expanded after the 2007-09 financial crisis when it was tasked with writing rules for the $650 trillion swaps market. "There is potentially a federal role here, and we have to make sure that we're on guard that whatever is traded is appropriately regulated," Chilton said. Chilton is an often outspoken Democrat on the CFTC's board, and the adoption of any regulation he is pushing for depends on the support of the others on the board, as well as what the CFTC's lawyers and other experts say. A spokesman for the CFTC declined to comment. The absence of physical Bitcoins meant people investing in the currency to speculate on a rise in its value could not be said to participate in cash markets, Chilton said, bringing them within the remit of the CFTC's mandate. "If you're buying Bitcoin and you are hoping that their value increases ... and you could purchase something with them in a day or a week or a month or a year, that is clearly a derivative of the actual Bitcoin," Chilton said. The U.S. Treasury Department in March said that Bitcoin exchanges would be subject to the same money laundering rules that govern money services business like Western Union. Link this Share this Digg this Email Reprints

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