Tuesday, June 4, 2013

Another Example of "The Government Doesn't Like Competition"

Federal Reserve initiates investigation into
PayPal, Bitcoin for security risks


The Federal Reserve is conducting an investigation into online payment systems like PayPal and virtual currencies such as bitcoin because financial institutions are concerned those online participants could disrupt the financial system, according to officials who gathered Monday for the International Monetary Conference in Shanghai.

In March, the Treasury Department concluded that issuers or exchangers of online money, including currencies that are not backed by the federal government, would be subject to money-laundering rules and regulations.

Also, the Department of Homeland Security had confiscated the accounts of Mutum Sigillum LCC, one bitcoin digital currency exchange operator. It claimed the company and a subsidiary had performed transactions “as part of an unlicensed money service business.”

It appears that the establishment is terrified of competing currencies. As more and more people head into precious metals, virtual currencies and other alternative forms of money, the confidence in the U.S. dollar and other currencies is being eroded due to irresponsible monetary policy.