Policy Experts Talk Transparency in Bitcoin at Foreign Affairs Event

Emerging digital currency protocols have enormous potential to transform payments as we know them today. And with more time and more clarity, industry insiders believe that promise can manifest in digital banking and digital identities.
This was the subject of a day-long meeting hosted by US-based journal Foreign Affairs at the Council on Foreign Relations townhouse in New York on Thursday, during which three expert panels spoke in front of an assembly of bank and tech experts and enthusiasts.
Anne Shere Wallwork, a senior counselor for strategic policy at the US Department of the Treasury, said her organisation supports financial innovation and more efficient transfers to bring more people into the financial system – but that it needs companies in the ecosystem to comply with a certain set of standards.
There’s no requirement to impose regulation on the bitcoin or Ripple protocols, she confirmed, but when anti-money laundering (AML) and counter-terrorist financing (CTF) controls apply or if there’s a node engaging with the fiat system, there need to be protections in place.
The difficulty is in establishing standards.
“The Bank for International Settlements is concerned with all of these issues that, in this country, are dealt with more on a state-by-state basis,’ Wallwork said. ‘But, I think that probably there will be some push if this industry is to obtain trust and obtain greater traction and legitimacy. How are they going to meet those requirements?’
Access to the global banking system
To date, making cross-border payments has been slow, expensive and perhaps difficult relative to the alternative that digital currencies provide. Digital banking is becoming more common in the developed world, but it remains true elsewhere that sending money abroad requires that the recipient have access to a bank branch.
Karen Gifford is the chief compliance officer at Ripple Labs and has eight years’ experience counseling and representing the New York Fed. She said smaller banks don’t really have direct access to the exclusionary global financial system.

This post was published at Coin Desk on February 16, 2015.