The controversy surrounding virtual currencies is prompting enthusiasts to try to bolster their legitimacy and fight perceptions that they attract illicit behavior.
A group of companies that are pushing virtual currencies such as bitcoin are expected on Tuesday to announce they have set up a self-regulatory organization to promote common rules for the fledgling industry – according to the WSJ.
The move is an effort to respond to state and federal regulators, who are trying to monitor transactions in virtual currencies for illegal activity. Bitcoin is the most popular of such currencies, which aren’t backed by a central bank.
The group, which will be called the Committee for the Establishment of the Digital Asset Transfer Authority, will set technical standards aimed at preventing money-laundering and ensuring compliance with laws.
“For new payment technologies such as Bitcoin, Ripple, Ven and other digital currencies to realize their full potential, making commerce cheaper and easier around the world, users will need to have trust in the integrity of the companies in the ecosystem,” said Jeremy Liew, a partner at Lightspeed Venture Partners, which is pursuing investments in the industry. “This trust comes from association with trustworthy investors [and] trustworthy business practices and the adoption of trusted regulatory oversight,”
Separately, a group of bitcoin supporters plans to announce on Tuesday that it has formed a charity that will make donations to environmental and public-health causes around the world. Backers of the BitGive Foundation include BitPay Inc., an Atlanta-based processor of bitcoin payments, the Bitcoin Foundation trade group, and lawyers at Seattle-based Perkins Coie LLP, which represents companies involved with virtual currency.
The charity, which will accept donations in bitcoin and dollars, “provides the opportunity to capture some of the capital formation anticipated from the success of Bitcoin for worthy causes such as health and disease research,” said Stephen Pair, a member of the charity’s board and Bitpay’s co-founder and chief technology officer.
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