The Homeland Security and Governmental Affairs Committee has been informed the virtual currency experiences the same benefits and pitfalls as the multiple other online payment systems, and is now exploring the “promises and risks” of the currency for “government and society at large.”
Since October, the currency’s value has trebled.
Silk Road closure
The currency was brought to international scrutiny – and the US Senate hearing – after the illegal goods Silk Road website was closed in October.
The site offered drugs, weapons and even killings, and users who purchased such goods paid in bitcoins.
Department of Justice representatives have been joined by spokespeople from the Securities and Exchange Commission to exchange their views on the virtual currency.
Submissions have also been introduced from the FBI.
“Virtual currencies, perhaps most notably Bitcoin, have captured the imagination of some, struck fear among others, and confused the heck out of the rest of us,” Senator Thomas Carper the chair of the committee, noted in his opening remarks.
Where once there was alarm, now there is education and understanding.
When the Silk Road first gained international notoriety, the currency was initially shunned. As its popularity grew however, Congress began to take measures to understand the currency and its implications.
Only launched in 2009, trade in bitcoin is understandably small compared to the established official currencies of countries.
But since its creation, the currency has become an increasingly popular way to do business online.
According to Bitcoincharts, there are over 12 million bitcoins in circulation, and on one exchange site, its value rose to a large USD 900 last Monday – before failing to USD 727.
Whilst many think bitcoin will gain increasing acceptance in the mainsteam, some have questioned whether bitcoin trading is too transparent – and consequently easier to use for unscrupulous purchases and services.
The Bitcoin Foundation’s Patrick Murck told the BBC that the network surrounding the currency was very open, with detailed accounts disclosing every transaction that has happened.
“I would challenge that it’s for illegitimate use or bad actions. What we’re finding is not that it’s a haven for illegitimate activities but that there are many legitimate uses,” he said.
Whatever people are using bitcoin for, Mr Brito notes “it’s a real thing and it’s not going anywhere.”