Wells Fargo Hopes To Offer Bitcoin Services

Max 'Beast from the East' Smolaks covers open source, public sector, startups and technology of the future at TechWeekEurope. If you find him looking lost on the streets of London, feed him coffee and sugar.

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The bank has organised a real summit dedicated to the virtual currency

On Tuesday Wells Fargo, the largest US bank by market cap, organised a summit dedicated to Bitcoin, the latest sign that traditional financial institutions are starting to take the virtual currency market seriously.

The event in San Francisco saw participation of finance executives, industry experts and representatives of the US government. According to the Financial Times, the discussion focused on the ways to prevent money laundering while still engaging with the decentralised economy, currently worth at least $10 billion.

In December 2013, analysts at Bank of America publicly acknowledged that Bitcoin offers “many benefits” over traditional currencies and has a “clear potential for growth”. BoA was the first major Wall Street bank to issue an opinion on the electronic currency.

The smell of money

Bitcoin is a decentralised cryptocurrency especially popular among people interested in keeping their transactions secret. It is not tied to any real money, but traded on various electronic exchanges to establish its price.

logo-WellsFargo-Over the past two years, Bitcoin has risen from obscurity to become the standard in virtual money, skyrocketing in value from just $0.03 in early 2010 to $945 (£575) at the time of publication.

The FT reports that Wells Fargo has launched a special group to look at the way the bank could safely offer Bitcoin services, and finance virtual currency start-ups. At the BTC London conference in July 2013, difficulty in access to capital and complex regulations were mentioned as two of the most serious hurdles facing virtual currency entrepreneurs.

“We want to make sure we understand what it is, what it does and what it does not . . . . The world is changing and will continue to change. Whether Bitcoin will be a big part of that, who knows?” said John Stumpf, CEO of Wells Fargo.

In 2013, the US treasury ruled that Bitcoin was a currency, and any business engaged in Bitcoin transactions should register as a money services business, on a par with traditional banks.

Later that year, the US Department of Homeland Security seized accounts belonging to Mt. Gox, one of the largest virtual currency exchanges in the world, claiming the Tokyo-based company had violated US laws by transmitting money without a licence.

It is hoped that initiatives by the financial sector will help entrepreneurs and regulators find some common ground.

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