State regulators see the challenge of regulating bitcoin and digital currency as no easy task.
Case in point: State regulators right here in Massachusetts are mulling bitcoin regulation in effort to make it clear just the play rules are when it comes to the use of these new, emerging currencies.
“We will be trying to come up with a model law or regulations states can use,” said David Cotney, commissioner at the Massachusetts Division of Banks to the Boston Herald. “This has gotten a lot of attention, and we want to make sure when we act, we get it right.”
Cotney is also the chairman of the Emerging Payments Task Force, a group made up of nine state regulators designed to learn more about crypto-currency technologies.
The Task Force held a hearing on the topic, from which they heard testimony from bitcoin-related businesses and regulators.
One of those regulators was Barbara Anthony of the Massachusetts Office of Consumer Affairs and Business Regulation, who warned that some consumers who are interested in getting involved with the digital currency may not be briefed on potential risks.
“Consumers and average consumers need to know that there are certain drawbacks to trading in a virtual currency,” she was quoted as saying. “The kinds of consumer protections that we’re used to, people have to understand they are not available to virtual currencies.”
One of these risks happens to be bitcoin’s now-famous volatility. Anthony’s example made the point that $100 worth of bitcoin today may not equal the same amount tomorrow.
And while the task force has no plans — at this time, at least — to enact regulations on digital currency, some members of the community are refreshed to see government officials seeking input from the public.
The Internal Revenue Service recently took flak for releasing a federal income tax guidance in which it instructed taxpayers to declare their bitcoin holdings as property for federal tax purposes. The tax authority did not seem to consult opinions from the community on the matter and pieced together the guidance arbitrarily.
[textmarker color=”C24000″]Source[/textmarker] Boston Herald