Bitcoin is on a lot of radars these days, as governments, companies and consumers grapple with how, exactly, to deal this new kind of online currency. To address the relevant issues from inside the industry, top thinkers in the Bitcoin space announced Tuesday that they are forming an industry group to set their own best practices and standards before governments move to impose regulations.
For the uninitiated, Bitcoin is a digital currency that is not regulated by any central bank but is accepted at many places across the Web as a form of payment just like any other. Bitcoin also has a reputation for anonymity, meaning that it has become popular not only with privacy-conscious folks who don’t want records of their transactions, but also with those looking to mask criminal pursuits such as buying drugs.
Fiscal regulators across the world have taken notice, particularly since an April boom and bust demonstrated just how volatile the currency can be.
On the flip side, there’s been a push to bring Bitcoin more into the mainstream. As my Post colleague Timothy B. Lee noted, prominent investors Tyler and Cameron Winklevoss (of Facebook lawsuit fame) recently took steps to create a mainstream vehicle for investing in Bitcoins.
With the general public becoming more aware of Bitcoins, now is a good time for the new group, called the Committee for the Establishment of the Digital Asset Transfer Authority, to work with regulators and policymakers to adapt current currency requirements to digital currency technology and business models, as well as develop and implement risk management standards.
The group has yet to say what those standards and practices may be, but the fact that industry players are looking to control the discussion around Bitcoin is another indication of how the digital currency market is maturing.
In some cases, the discussion with regulators can’t come soon enough. Tuesday’s announcement comes just a day after the Associated Press reported that a Bitcoin exchange in Thailand said it had suspended trading because officials in that country declared the currency illegal in all its aspects. According to the report, Thailand’s central bank told the exchange that it is unlawful to trade Bitcoins, move them over the country’s borders or use them to buy or sell goods and services.