A substantial number of Washington lawmakers have still refrained from entering the bitcoin debate. One politician wanted to impose a ban on the cryptocurrency, while another legislator came out in favor of the digital currency.
During the United States House Committee on Small Business hearing called “Bitcoin: Examining the Benefits and Risks for Small Business,” New York Democratic Congresswoman Nydia M. Velazquez delivered a speech that many in the bitcoin community have called articulate and terrific.
The Democratic representative outlined how bitcoin benefits both small businesses and consumers, especially when it comes to saving money on transaction costs as well as protecting one’s privacy.
“The relatively recent arrival of digital currencies is one technology that presents significant opportunity. Just as the Internet has empowered entrepreneurs to reach new, global markets and identify more efficient ways of doing business, digital currencies like Bitcoin can save small firms on transaction costs,” said Velazquez in her prepared remarks.
“For a small company accepting major credit cards, each card swipe can cost as much as one-quarter of a cent, in addition to having to return three to six percent of sales total to the credit card company. Some credit card companies also charge businesses to join their network. By contrast, when utilizing Bitcoin, there is no cost of joining the network. Fees are less than one percent. For large retailers and big box stores, these costs may sound minor, but among small companies operating on thin margins, those expenditures add up.”
Velazquez continued that bitcoin and other virtual currency systems like it could incite competition against conventional financial institutions and payment options in terms of lower fees – this has been one of the important debate elements for quite some time because how could Visa and MasterCard allow bitcoin to survive?
She acknowledged that a large number of small businesses are utilizing the power of bitcoin – most are online sellers but one-in-five enterprises are brick-and-mortar retailers, “suggesting the technology is gaining broader experience.”
Although her speech would sound like a full endorsement of bitcoin, she did cite various security concerns, price fluctuations and the future of bitcoin after last month’s IRS ruling. These are all points that the average person has as well.
In the end, according to Velazquez, consumers must be assured that their money will be safe and will completely benefit from the virtual currency.
“In all these areas, the Committee has an obligation to ensure small businesses’ interests are taken into account. We want small firms to benefit from this technology, but we must see to it that there are safeguards protecting them and their customers. Likewise, we must see that tax regulatory changes do not preclude the use of this currency. I expect today’s hearing will help us learn about complex issues like these and assist the Committee as it addresses such matters going forward.”
It remains to be seen what legislators on Capitol Hill will do regarding bitcoin. Will it impose tight controls and restrictions? Will it conclude that it has jurisdiction on the matter? Will it somehow provide the Federal Reserve with the regulatory power to overhaul bitcoin?
Perhaps bitcoin lobbyists are right now in the midst of gaining friends, which might have happened Tuesday with Velazquez.
