Moran: Much still to be learned about Bitcoin

11/29/2013

LAWRENCE (AP) — A lack of accountability is just one of U.S. Sen. Jerry Moran's concerns about the bitcoin, a virtual currency that is neither minted nor controlled by any government or central banking system.

LAWRENCE (AP) — A lack of accountability is just one of U.S. Sen. Jerry Moran's concerns about the bitcoin, a virtual currency that is neither minted nor controlled by any government or central banking system.

Currency regulators in the U.S. and elsewhere are looking into the implications of the bitcoin, which exists only on the Internet. Moran, a Kansas Republican, said he's still trying to figure out where he stands on the issue.

"It's a difficult subject to get your arms around and understand," Moran told The Lawrence Journal-World last week.

Moran, who studied economics at the University of Kansas and worked briefly in the banking industry before going to law school, has served on the Banking Committee and a subcommittee that deals with the banking aspects of national security and international trade and finance.

That subcommittee held its first hearing last week to educate members about the currency and some of the concerns surrounding it.

Bitcoin is grabbing attention mostly because of its rapid growth and potential for use in illicit transactions such as drug trafficking and money laundering.

About 10,000 merchants worldwide accept Bitcoins for payment, according to BitPay, a payment service provider. Many of those are eCommerce retailers such as BitcoinShop that offer a variety of consumer products.

While traditional currencies are minted by national governments and controlled by central banks such as the Federal Reserve, Bitcoin is more mysterious. It is traded on a peer-to-peer network similar to the networks used to swap music and video files, meaning transactions can avoid detection from law enforcement and taxing entities.

"Particularly as I learned about how the value fluctuates so radically, there is great harm that can be had to a consumer in this virtual currency," Moran said.

Moran said there is also concern that there is nobody who can be held accountable for its management.

Still, Moran also questioned during the subcommittee hearing whether unilateral actions by the U.S. in regulating Bitcoin or any other virtual currency could inadvertently drive a new and potentially beneficial economic system offshore and deprive Americans of its benefits.

"I don't know what happens next," Moran said. "The Banking Committee is going to continue to pursue this. We're just getting started on trying to understand the topic."

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