The Hawkeye State is worried about its citizens investing their money in bitcoin.
Regulators in the state of Iowa have issued a warning to its citizens over the investment risks associated with bitcoin. Iowa has become one of a handful of U.S. states to publish consumer and investor alerts to the public regarding the peer-to-peer decentralized virtual currency.
The state’s Department of Commerce Insurance released the investor advisory and listed the past occurrences, the paucity of regulations, the volatility of bitcoin’s prices and bitcoin holdings not being insured by the Federal Deposit Insurance Corporation (FDIC).
“Unlike traditional currency, these alternatives typically are not backed by tangible assets, are not issued by a governmental authority and are subject to little or no regulation,” said Insurance Commissioner Nick Gerhart. “The value of virtual currencies is highly volatile and the concept behind the currency is difficult to understand even for sophisticated financial experts. Investors should be aware that investments that incorporate virtual currency present very real risks.”
We have reported in the past of various state governments identifying their concerns and informing the general public about them. A growing number of states across the country have been releasing these advisories and appear to be disgruntled over the fact that the federal government, the Federal Reserve or any other federal body have yet to institute regulations pertaining to the virtual currency.
The states of Missouri, Nevada, Tennessee, Idaho and New York have posted consumer alerts in the last few weeks akin to how central banks and governments around the world issued warnings about bitcoin late last year and earlier this year. It’s expected that more U.S. states will continue the trend throughout 2014.
Wisconsin financial regulators have also warned of the risks of investing in Bitcoin.
It was reported that the U.S. Conference of State Bank Supervisors Emerging Payments (CSBS) Task Force will be in Chicago to hold a public meeting in regards to emerging payments systems and virtual currencies. One of the members of this organization is New York Department of Financial Services superintendent Benjamin Lawsky, who introduced bitlicenses in the Empire State for businesses that deal with bitcoin.
“We’re looking at the hearing as an educational opportunity, as an opportunity to learn more about all the innovations in payments.” Education and future programs are on the list long-term for planning,” said Margaret Liu, Senior Vice President and Deputy General Counsel of the CSBS.
Speakers listed are Bryan Krohn, Chief Financial Officer of BitPay; Karsten Behrend, Head of Compliance at Xapo; Megan Burton, Chief Executive Officer of CoinX; and Annemarie Tierney, EVP Legal and General Counsel at SecondMarket.
Tennessee was also a state that launched the Emerging Payments Task Force, whose initiative is to propose consumer protection legislation that also balances out the innovation of the free market pertaining to bitcoin and other virtual currencies and growing payment networks.
