If you’re tired of hearing of about Bitcoin and tired of hearing about Congress, we’ve got great news for you: Congress gets its first Bitcoin ATM this week.
Okay, it’s just a demonstration from the company Robocoin, but it highlights some of the changes virtual currency has to go through in the non-virtual world. For one thing, registering securely with Robocoin to use the Bitcoin ATM involves setting aside the pseudonymity Bitcoin users love online – phone number, photo ID, and palm-scan required.
Bitcoin: How Washington is reacting
Those demanding a ban
It’s safe to say that Senator Joe Manchin (D-W. Va) doesn’t like bitcoins. He thinks they are disruptive to the economy and have allowed users to participate in illegal activity. So he wrote a letter to federal regulators demanding bitcoins be banned. Unfortunately for him, Federal Reserve chair Janet Yellen told a congressional committee that the Fed can’t really impose rules on Bitcoin, as it’s outside their purview. In response, Manchin has backed off, though just slightly.
Even though Bitcoin is more than five years old, lawmakers are still trying to get a handle on it. So, they’ve held hearings. In a meeting the Committee on Homeland Security and Governmental Affairs held last year, Ben Bernanke, then the Fed chair, said virtual currencies like Bitcoin might hold promise. At a hearing last month, lawmakers heard about the benefits and drawbacks bitcoins might have for small businesses. So far, none of these hearings have resulted in any legislation to regulate cryptocurrencies.
Though no national Bitcoin regulations have passed, that doesn’t mean that there hasn’t been talk about rules, both at the federal and state level. U.S. Senator Tom Carper (D-Del) recently urged the U.S. to lead the way in virtual currency regulation. The IRS is classifying Bitcoin as property for tax purposes and saying that people who successfully mine bitcoins have to report that in their gross income. Lawmakers in California are trying to pass legislation expressly declaring bitcoins are legal. State regulators are also getting in on the action. The Texas State Securities Board issued an emergency cease and desist order against a company using bitcoins. And New York’s Department of Financial Services will require Bitcoin exchanges to get ‘BitLicenses’ if they want to operate in the state.