Committee Explores Risks and Benefits of Bitcoin Use by Small Businesses
The Small Business Committee, under the chairmanship of Rep. Sam Graves (R-MO), today examined Bitcoin adoption by small businesses. In the first Bitcoin hearing in the U.S. House of Representatives, the Committee heard testimony on the potential risks and benefits involved.
Bitcoins are a form of virtual currency first introduced in 2008 that allows users to exchange value digitally through the Internet. Despite not being backed by a government or holding any intrinsic value of their own, Bitcoins are growing as an alternative payment system. Testimony today provided valuable insight on Bitcoins, their current and future use, and whether small businesses have more to gain or lose by embracing this trend.
“Rapid changes in technology such as Bitcoin can create both opportunities and risks for small business. We want to help small businesses navigate this issue by providing information to help them with these considerations,” said Chairman Graves. “I’m pleased with our thorough discussion of this alternative payment method. Today’s examination of Bitcoin’s potential pitfalls and advantages added to the Committee’s knowledge base, and will inform Congress’s decision-making as virtual currencies are more widely used and come under greater regulatory scrutiny.”
Video and materials from the hearing are available on the Committee’s website HERE.
Jerry Brito, Senior Research Fellow, Mercatus Center, George Mason University, Arlington, VA, said, “Like the Internet itself, Bitcoin has the potential to be a platform for the kind of permissionless innovation that has driven so much of the growth of our economy. And like all emerging technologies, Bitcoin also presents risks. The challenge for policymakers is to address those risks while doing no harm to the innovative potential of the technology.”
Adam White, Director of Business Development and Sales, Coinbase, San Francisco, CA, said, “Because of the borderless and global nature of Bitcoin, a Bitcoin payment made by customer in New York looks identical to a merchant as a Bitcoin payment made by a customer in London, Buenos Aires, or Tokyo. Moreover, there are no international currency conversion fees associated with Bitcoin payments so merchants can sell low margin items just as profitably abroad as they do domestically. The ability to easily begin accepting payments from customers around the world can open up whole new markets for merchants, and significantly improve top-line revenue.”
Mark T. Williams, Executive-in-Residence/Master Lecturer, Boston University School of Management, Boston, MA, said, “Businesses that are willing to adopt and utilize new technology, such as virtual currencies, may gain a distinct competitive advantage (e.g., cost savings, increased sales) over their competitors. However, blindly adopting technology without understanding the full risk implications can be hazardous to a company’s financial health. Bitcoin is an example of new technology that has clear promise, but also poses a multitude of risks for both businesses and consumers.”