The Emerging Payments Task Force, a body of nine members of the Conference of State Bank Supervisors (CSBS) reviewing virtual currency and its effects on the broader financial marketplace, is reportedly working on a rule book designed to protect users of virtual currency without unnecessarily stifling it.
For months, there have been hearings and talks on how to regulate virtual currency. Little has come to fruition as of yet, in part due to the awkward nature of such an undertaking- virtual currencies aren’t created or governed by a central authority. While officially recognized as property by the IRS for tax purposes, their intrinsic value is nearly impossible to gauge as it would be for regulated commodities.
The only major ruling on virtual currency use has come from FinCEN, who required firms engaging even solely in virtual transactions, absent of fiat, to become licensed as a money services business (MSB). Achieving this in all 50 states is no small task; perhaps one day these discussions can bear fruit for a unifying federal framework.
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David Cotney, Massachusetts Commissioner of Banks and leading the task force, told Reuters on the sidelines of a public hearing on the issue:
“We may be looking at some type of model definitions, or model laws or regulations, and very likely recommendations to either our federal colleagues or to Congress.”
A key goal is to come up with rules dictating which virtual currency operators are required to be regulated, and which ones not.
The task force has given itself one year to complete its task. It is also covering other emerging payment systems, such as mobile payments and PayPal.