States Vying to Write Bitcoin Rules

New York and California are taking different approaches, but their final decisions on regulation of bitcoins are likely to set the tone for the rest of the U.S.

California and New York, home to Silicon Valley and Wall Street, are preparing to write rules of the road for entrepreneurs driving a surge of interest in bitcoins and other virtual currencies.

The outcome could determine how big a threat bitcoins pose to established payment companies including JPMorgan Chase & Co. and Visa Inc. as well as where venture capital and talent converge to form a geographic hub for U.S. startups.

“We believe a healthy and respectful dialogue between key stakeholders will help ensure that the substantial benefits of the digital economy are met, while mitigating many of the risks,” Murck said at the hearing on Nov. 18.

California law requires companies that transmit monetary value to obtain licenses from its Department of Business Oversight, spokeswoman Alana Golden said. Its lawyers are currently weighing whether companies that only transmit a digital currency fall under this definition, Golden said.

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