Leaders in emerging payments and virtual currency have formed a committee to establish a self-regulating body to ensure regulatory compliance as the marketplace changes.
The Committee for the Establishment of the Digital Asset Transfer Authority, as the new agency will be called, will work to promote the responsible development of emerging payments.
Founding members include Charlie Shrem, CEO of BitInstant and self-touted Bitcoin millionaire, Chris Larsen, founder and CEO of virtual currency network OpenCoin Inc., and ZipZap Inc., a company which digitizes cash payments. It counts Promontory Group as an advisor.
The Digital Asset Transfer Authority (DATA) will provide best practices and technical standards, including anti-money laundering compliance guidance for companies that work with digital currency and other emerging payments systems. The committee will work as a liaison among public officials, businesses and consumers and create common rules to protect consumers.
Members will be required to obtain all applicable licenses and regulation.
At a time when virtual currencies are revolutionizing payments through technological innovations, they also are drawing intense regulatory scrutiny as regulators and lawmakers grapple with these developments, says Dax Hansen, a leading payments attorney who represents technology companies. Industry best practices and standards will contribute to productive dialogues as these innovative payment systems roll out.