Senate to discuss virtual currencies

Bitcoin’s price climbed to a record at $330.01 on the BitStamp online exchange Friday as U.S. senators scheduled a hearing to discuss the future of the digital money and other virtual currencies.

The U.S. Senate Committee on Homeland Security and Governmental Affairs will meet Nov. 18 “to explore potential promises and risks related to virtual currency for the federal government and society at large,” it announced in a statement Friday.

The price of Bitcoins has more than doubled even after the closing five weeks ago of the “Silk Road Hidden Website,” where people could obtain drugs, guns and other illicit goods using Bitcoins. While the digital money lost a third of its value in the days after the website was shut down, it’s becoming an increasingly popular way of paying for goods and services on the Web and in stores that accept the tender.

“Bitcoin is obviously getting a lot of attention from the federal government on the regulatory side,” said Nicholas Colas, an analyst at ConvergEx Group. “Given the involvement of the currency in illegal activities, that is entirely warranted. I expect these hearings to be largely informational, which is good for Bitcoin.”

The hearing, titled “Beyond Silk Road: Potential Risks, Threats, and Promises of Virtual Currencies,” will invite witnesses to testify about the challenges facing law enforcement and regulatory agencies, and include views from “non-governmental entities who can discuss the promises of virtual currency for the American and global economies.”