New York’s top financial regulator is looking at issuing a “BitLicense†for businesses that conduct transactions in virtual currency like bitcoin.
Benjamin Lawsky, the state’s superintendent of financial services, announced on Thursday that he would conduct a public hearing to discuss the burgeoning world of digital money. Participants will discuss the feasibility of a license that would make the virtual currency market more like those for other forms of money.
If the plans go ahead, it would be an important step in bringing bitcoin and other virtual currencies closer to the financial mainstream. In another move in the same direction, the Federal Election Commission held a hearing on Thursday at which it considered whether to legalize campaign donations made in virtual currencies.
Since bitcoin was created in 2009 by anonymous programmers, it has frequently been treated with derision by many financial insiders and authorities, who have described it as a speculative mania. Many authorities still hold to that position, but the currency’s online network, which is not controlled by any centralized authority, has survived several crises.
On Thursday, the value of a single bitcoin was trading near an all-time high, at $425, on the exchange Mt. Gox. The price has skyrocketed in recent weeks.
Several regulators have been looking at ways to make sure virtual money cannot be used for laundering money or other criminal purposes. In October, the federal authorities arrested the operator of an online marketplace where they said bitcoin could be used to buy drugs and other illegal goods.
“The cloak of anonymity provided by virtual currencies has helped support dangerous criminal activity, such as drug smuggling, money laundering, gun running and child pornography,†Mr. Lawsky said in a letter announcing the hearing, which has not yet been scheduled.
But Mr. Lawsky indicated that there could be important and legitimate uses for new forms of money.
“The virtual currency industry represents a new frontier in electronic commerce, and it is important that regulators obtain the necessary information,†he said.
