Can Bitcoin make a good first impression with top federal agencies?


(zcopley / Flickr)

It could be the virtual currency's biggest moment yet in Washington.

Bitcoin advocates are meeting with a handful of federal agencies Monday at an event hosted by the Treasury Department's Financial Crimes and Enforcement Division (FinCEN) to talk about how the government might regulate the digital money. The discussions are to involve many of the country's top law enforcement and financial agencies, including the FBI, the Secret Service, the IRS, the Drug Enforcement Administration and the Department of Homeland Security.

Also attending will be officials from the Justice Department, the Securities and Exchange Commission, National Credit Union Administration, Money Transmitter Regulators Association and the Conference of State Bank Supervisors would also be in attendance, a Treasury official confirmed.

"This is part of our ongoing dialogue with virtual currency operators within the U.S.," the Treasury Department official said. "We want money services businesses in the U.S., if you're traditional or virtual, to practice the same money laundering controls."

In March, the Treasury Department said that companies buying or selling Bitcoins would have to register with the agency and report their large transactions, just as most banks and brokerage firms do with dollars and cents. The current rules largely ignore individuals who hold or use Bitcoins to buy goods and services, though technically any income derived from Bitcoins is considered taxable by the IRS.

Congress has also asked the Obama administration for information on its plans for regulating digital currencies.

While its participants are mostly downplaying the significance of the Monday meeting, this will be an important chance for the Bitcoin community to make a positive impression on federal regulators.

Brian Fung covers technology for The Washington Post, focusing on telecommunications and the Internet. Before joining the Post, he was the technology correspondent for National Journal and an associate editor at the Atlantic.

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