i found something interesting on my local newspaper's website pilotonline.com and i was wondering what this could mean for this company.
By Emery P. Dalesio
The Associated Press
© May 25, 2015
RALEIGH
Legislators in America's second-largest banking center are considering regulations for Bitcoin and other virtual currencies.
North Carolina's banking commissioner is seeking legislative authority to require that companies circulating digital IOUs meet consumer protection, anti-money laundering and other standards. Legislation passed the state House earlier this month and is pending in the Senate.
Though North Carolina State University's football team won last December's Bitcoin Bowl in St. Petersburg, Florida, the public's understanding of virtual currency is still in catch-up mode.
The online-only money allows users to swap cash for online funds using Internet exchanges, then store it in a wallet program on their computer. The program can transfer payments to a merchant or private party anywhere in the world, eliminating transaction fees and the need to provide bank or credit card information. There are dozens of decentralized currencies based on the bitcoin protocol like Litecoin, Auroracoin and Peercoin.
But the new realm of virtual money has come with problems. The Consumer Financial Protection Bureau last summer warned that the currencies are not backed by the government, have volatile exchanges rates, are targeted by hackers and scammers, and that Bitcoin-based deposits are not federally insured like bank accounts.
The difficulty in tracing the currency has led to its use by drug dealers, child pornographers, identity thieves and other criminals.
"There's two sides to the Bitcoin. One side is the clear potential value of the innovation, and what that could portent for the payment system. Since we're a business friendly state, we want to facilitate that," said state Banking Commissioner Ray Grace said, who asked for the legislation.
But regulation was needed to keep bad actors out, he said. "We wanted to mitigate the risk while facilitating the potential benefits down the road."
Anonymous opponents of the state law created a website arguing that regulations could restrict financial innovation. A person responding to an Associated Press reporter's email through the website refused to identify a spokesman or answer questions.
Bitcoins and other virtual currencies have been moving into the mainstream with Overstock.com, satellite TV provider Dish Network and travel site Expedia announcing last year they would accept digital money as payment. Legislators in Utah and New Hampshire this year considered whether to accept digital payment for taxes and other payments, but neither state took that step.
State financial regulators started moving after the U.S. Treasury Department's Financial Crimes Enforcement Network said in 2013 its requirements for money services applied to virtual currency exchangers and administrators, requiring that exchanges register.
Regulators in New York — home of the country's banking capital, trailed by Charlotte — this year established rules to protect consumers and Bitcoin entrepreneurs and this month issued the first charter for a business that exchanges virtual currency.
State bank regulators in Texas, Washington and Kansas issued guidelines last year outlining their regulation over virtual currency traders.
The North Carolina legislation would revise regulation of non-bank companies that make a business out of transmitting funds for others. The business is regulated to prevent money laundering, cut off terrorism financing, and to protect consumers from the risk that money-transfer businesses fail to deliver the funds as agreed.
To be licensed in North Carolina, companies must:
— post a surety bond intended to protect customers of at least $150,000 growing to a maximum of $250,000 based on trading volume.
— have a net worth of at least $250,000, which the banking commissioner could increase if deemed necessary.
— conform to a clear set of prohibited practices such as never failing to send money as directed.
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