US States Edge Toward Cryptocoin Regulation

SonicSpike points out an article from the Pew Charitable Trusts' Research & Analysis department on the legislation and regulation schemes emerging in at least a few states in reaction to the increasing use of digital currencies like Bitcoin. A working group called the Conference of State Bank Supervisors’ Emerging Payments Task Force has been surveying the current landscape of state rules and approaches to digital currencies, a topic on which state laws are typically silent. In April, the task force presented a model consumer guidance to help states provide consumers with information about digital currencies. A number of states, including California, Massachusetts and Texas, have issued warnings to consumers that virtual currencies are not subject to “traditional regulation or monetary policy,” including insurance, bonding and other security measures, and that values can fluctuate dramatically. ... The article focuses on the high-population, big-economy states of New York, California and Texas, with a touch of Kansas -- but other states are sure to follow. Whether you live in the U.S. or not, are there government regulations that you think would actually make sense for digital currencies?

Can we just recognize it as currency and be done?

[QilessQi]

I imagine that the sorts of things we'd want to regulate about "digital currencies" are the same things we'd want to regulate about any foreign or domestic currency; e.g.:

- You can't use it to pay for illegal goods or services
- You can't receive it in payment for illegal goods or services
- You can't use it to hide other transactions related to illegal goods or services (i.e., money laundering)

So... can we just formally decree that cryptocoins meet the definition of a "currency", and be done with it? Otherwise I'm afraid that we'll be creating another legal (and patent) swamp where "...with Bitcoins" will become the new "...on the Internet".