The committee was told that virtual currencies were a "legitimate¹ financial service" with the same benefits and risks as other online payment systems.

 

The Homeland Security and Governmental Affairs Committee is exploring the "promises and risks" of Bitcoin for "government and society at large". 

 

The currency has more than trebled in value since October.

 

 

The US Senate hearing was prompted by the closure of the Silk Road website in October. The site, which sold drugs and other illegal goods, was shut down by the FBI.

 

Users of the site were required to pay for their transactions using bitcoins.

 

Representatives from the Department of Justice and financial regulator the Securities and Exchange Commission have been asked to provide their views about virtual currencies to the committee and submissions² have been received from the FBI and the US Federal Reserve.

 

"Virtual currencies, perhaps most notably³ Bitcoin, have captured the imagination of some, struck fear among others, and confused the heck out of the rest of us," the chair of the committee, Senator Thomas Carper, said in opening remarks.

 

The FBI, in a letter to the committee released on Sunday, said that it recognised virtual currencies offered "legitimate financial services" but they could be "exploited by malicious⁴ actors".

 

Mythili Raman, the head of the Justice Department's Criminal Division, told the committee: "We have seen increasing use of such currencies by drug dealers⁵, traffickers of child pornography（色情文学）, and perpetrators（犯罪者） of large-scale fraud schemes."

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