Task Force of State Regulators Developing Model Law for Bitcoin

State regulators around the country are considering rules for virtual currencies as popularity of bitcoin grows.

“We will be trying to come up with a model law or regulations states can use,” says David Cotney, commissioner of the Massachusetts Division of Banks and chairman of the Emerging Payments Task Force. “This has gotten a lot of attention, and we want to make sure when we act, we get it right,” he told The Boston Globe.

The task force is made up of nine state regulators from around the country, and will look at everything from bitcoin to mobile payments.

The task force in mid-May held a hearing on bitcoin and other virtual currencies, hearing testimony from bitcoin companies and regulators, include Barbara Anthony, undersecretary of the Massachusetts Office of Consumer Affairs and Business Regulation.

Anthony said one of the key issues is that average consumers may not be aware of some of the risks, including the bitcoin’s volatile value and the fact there is no central authority that guarantees bitcoin’s worth. “You could buy $100 worth of bitcoin right now and over a period of time that value is not going to be $100,” Anthony said.

Cotney told the Globe that he is not planning on implementing any regulations on bitcoin immediately, but could down the road. “We will certainly be looking at the efforts of this task force to help guide us.”