Bitcoin companies discuss regulatory concerns with Conference of State Bank Supervisors

Last week, the Conference of State Bank Supervisors (CSBS) hosted its Emerging Payments Task Force at a meeting in Chicago. The task force met with representatives from SecondMarket, CoinX, Xapo and BitPay to discuss the the current state of bitcoin regulation and its impact on the quickly growing virtual currency industry. Speaking with the CSBS panel over the course of a two-hour long hearing, the representatives said that unclear and unsupportive regulation are hindering greater adoption of virtual currencies, both for consumers and industry.

In particular, the company executives noted the difficulty they experience building partnerships with banks due to unclear state and national rules. BitPay CFO Bryan Krohn told the panel that this lack of clear guidelines makes bitcoin-based business seem too risky. “Banks are just backing away. The cost for doing this is too burdensome, and they just say ‘No.'”

CoinX CEO Megan Burton echoed this concern, suggesting the need for a “bridge” between money-services businesses (MSB) dealing in virtual currencies and traditional banking. SecondMarket’s Executive Vice President Annemarie Tierney said that the perception that bitcoin companies are too “high risk” has already cost her company an established banking partner, even though their business is neither an MSB or an exchange. She claims that simply being a bitcoin business “raised our risk profile, and it was too much work for [the bank] to figure it out.”

The CSBS task force is activel studying the regulatory landscape around bitcoin, and plans to publish it’s finding and proposed guidelines later this year.