Congress Will Get to Play With Bitcoin Next Week

A pile of Bitcoins are shown here after Software engineer Mike Caldwell minted them in his shop on April 26, 2013 in Sandy, Utah. Bitcoin is an experimental digital currency used over the Internet that is gaining in popularity worldwide. 
National Journal
Dustin Volz
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Dustin Volz
April 2, 2014, 8:11 a.m.

Many law­makers in Con­gress still might not un­der­stand what bit­coin is, but next week they’ll at least be able to get their di­git­al hands on it.

Thanks to some as­sist­ance from Rep. Jared Pol­is, Rob­ocoin — a com­pany that builds ATMs for the vir­tu­al cur­ren­cies — will set up an in­form­a­tion­al kiosk in a con­gres­sion­al of­fice build­ing on Tues­day. The move comes amid grow­ing con­cerns about how, or if, gov­ern­ment should reg­u­late the bud­ding al­tern­at­ive pay­ment mar­ket that ex­ists only in com­puters.

“Come see a Rob­ocoin demo, hear a brief bit­coin talk from Con­gress­man Jared Pol­is, try buy­ing bit­coin your­self, and ask your burn­ing bit­coin ques­tions,” the in­vit­a­tion sent out to mem­bers of Con­gress reads. “Wel­come to the fu­ture of anti-fraud, anti-identi­fy theft, and anti-money laun­der­ing — this is cus­tom­er pro­tec­tion built for the 21st cen­tury.”

Bit­coin and oth­er di­git­al cur­ren­cies like it can be ex­changed for tra­di­tion­al dol­lars or spent at par­ti­cip­at­ing on­line vendors and some real-world re­tail­ers. Its sup­port­ers view it as a quick and in­nov­at­ive form of pay­ment that ducks some of the fees com­monly as­so­ci­ated with on­line trans­ac­tions, while its crit­ics view it as a province of an­onym­ous act­ors with ne­far­i­ous in­tent, such as money laun­der­ing or drug traf­fick­ing.

Pol­is, a Col­or­ado Demo­crat, has re­cently be­come an out­spoken ally of bit­coin, and an aide in his of­fice con­firmed that the event was largely meant to serve as “ex­pos­ure for law­makers who are still learn­ing about bit­coin.”

Last month, Pol­is jok­ingly called for a ban on the U.S. dol­lar last month in re­sponse to a let­ter Sen. Joe Manchin sent to fin­an­cial reg­u­lat­ors ask­ing them to ban the di­git­al cur­rency.

“The ex­change of dol­lar bills, in­clud­ing high-de­nom­in­a­tion bills, is cur­rently un­reg­u­lated and has al­lowed users to par­ti­cip­ate in il­li­cit activ­ity, while also be­ing highly sub­ject to for­gery, theft, and loss,” Pol­is said.

Manchin has since come around some­what on bit­coin, but linger­ing ques­tions about bit­coin’s volat­il­ity and feas­ib­il­ity per­sist. The IRS is­sued tax guid­ance last week that qual­i­fied bit­coin not as a cur­rency but as prop­erty, a de­cision that earned mixed re­views.

The re­cent col­lapse of Ja­pan­ese-based bit­coin ex­change Mt. Gox, which led to the quix­ot­ic dis­ap­pear­ance of a chunk of bit­coin val­ued at hun­dreds of mil­lions of dol­lars, has made some in­vestors more skit­tish.

Bit­coin’s pop­ular­ity has ex­ploded in the past year, as its us­age in­creased by more than 75 per­cent between Ju­ly and Decem­ber 2013. The fer­vency of its early ad­op­ters and grow­ing mar­ket value has led many in­vestors and busi­nesses, such as the Sac­ra­mento Kings and Over­stock.com, to al­low bit­coin as a meth­od of pay­ment.

The event next week is sched­uled for Tues­day from 4 to 7 p.m. in the Ray­burn House Of­fice Build­ing. It fol­lows a hear­ing on bit­coin be­ing held Wed­nes­day by the House Small Busi­ness Com­mit­tee, the first in the lower cham­ber on the top­ic. Late last year, the Sen­ate con­vened two hear­ings prob­ing the risks and op­por­tun­it­ies as­so­ci­ated with vir­tu­al cur­ren­cies.

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