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US financial regulatory and government leaning toward proponency of Bitcoin is continuing in the wake of several high profile venture capital investments from mainstream financing companies, as well as New York State’s controversial proposal led by Benjamin Lawsky to create a BitLicense, which provides a specific regulatory framework for virtual currency.
This week, former US Securities and Exchange Commission (SEC) Chairman Arthur Levitt has made his advocacy of Bitcoin perfectly clear by agreeing to advise two Bitcoin companies, namely BitPay and Vaurum.
Unlike the initial array of mavericks which dominated the Bitcoin scene during last year’s headline-inspiring virtual currency related events such as the US government seizure of Silk Road, and customer losses suffered from the demise of MtGox and wildly varying values, this year’s stabilization of the entire industry has resulted in attracting the attention of very prominent figures, of which Mr. Levitt is a prime example. Far from being a young upstart with a point to prove, Mr. Levitt is a silver-haired veteran of conservative US financial regulation,
Indeed, Mr. Levitt’s career as Chairman was promient indeed. He was the longest-serving Chairman of the SEC, with his tenure extending from 1993 to 2001. He was widely regarded as a champion of the individual investor, whilst overseeing non-bank financial markets activity on a federal basis. Since May 2001 he has been employed as a senior adviser at the Carlyle Group, as well as serving as a policy advisor to Goldman Sachs and as a Director of Bloomberg LP, parent of Bloomberg News.
Mr. Levitt’s interest in the two firms represents a further step toward mainstream appeal for Bitcoin related technology firms, which in itself paves the way for the future of Bitcoin with many technology developers and government officials understanding that if Bitcoin wishes to make its way as a bona fide currency, its development and regulatory structure will be the method by which this occurs.
The two firms to which Mr. Levitt has pledged his support perform very different functions within the Bitcoin ecosystem, BitPay being a rapidly expanding payment processing solution for virtual currency which by September this year had reached 10,000 merchants as reported by LeapRate at the time.
The firm was subject to a $2 million venture capital funding round in May this year, led by PayPal founder Peter Thiel, thus demonstrating substantial credibility as PayPal has long dominated the payment processing sector.
The second firm, Vaurum allows financial institutions to trade, store and offer bitcoins to customers, and has been operational for two years.
In yet another diversion from last year’s recalcitrance by regulators, the US government and investors with regard to Bitcoin in the advent of the demise of MtGox, and the seizure of Silk Road, Mr. Levitt considers that regulation will be key to Bitcoin’s success because it will help legitimize the currency.
“The founders of these companies tend to be entrepreneurial, irreverent and probably feel that regulation should be avoided at all costs,” he said in an interview. “I understand where they’re coming from but I also believe that regulations really will do more to establish their credibility as an alternative. It’s got to be sensible, balanced regulation and it can’t be regulation that chokes them” stated Mr. Levitt in an interview with technology news portal CNET.
With prestigious figures such as Mssrs Lawsky and Levitt bringing forth means of putting Bitcoin further into the mainstream, the future for the virtual currency in the Land of the Free looks bright.