Michelle Willard

mwillard@dnj.com

MURFREESBORO – As the state of Tennessee began offering warnings in early August about the use of digital currency, the Tennessee Bitcoin Alliance was taking shape in Middle Tennessee.

Murfreesboro resident John Meese said the alliance formed to help make Tennessee a leader in digital currency innovation by encouraging a friendly regulatory environment.

“A lot of the innovation is going on in San Francisco and New York City. We think Nashville could be next,” Meese said.

Before eager investors enter the bitcoin market, Tennessee Department of Financial Institutions Commissioner Greg Gonzales announced his department is offering guidance to Tennesseans who want to engage in transactions or investments involving digital currency.

“As these make their way into the marketplace, it is important for consumers and investors to educate themselves with accurate information to make informed decisions about this innovative and evolving industry,” Gonzales said.

Meese wants to educate the public and local small businesses about the use of bitcoin at a workshop called Bitcoin 101 for Merchants, set for 5-7 p.m. Tuesday, Aug. 26, at Social Bar and Nightclub on the Square in Murfreesboro.

“It’s a really interesting form of technology,” Meese said about the digital currency that was introduced in 2009 as open-source software.

Meese said bitcoin democratizes the transfer of currencies on a global scale.

He said accounts, a.k.a. “wallets,” are free, transactions are nearly instantaneous, no banks or governments act as regulators, and there are no 3 percent transaction fees.

And what Meese sees as a benefit, Gonzales sees as a warning sign.

“(Digital) currency is defined as an electronic medium of exchange that does not have all the attributes of real currencies,” Gonzales said.

Meese defined bitcoin as an open-source, decentralized currency that only exists in a digital form, which means it “is not under the whim of a single government.”

To him this removes barriers to growth and transactions that are placed on traditional economies by both the banking industry and government regulators.

But to Gonzales, Bitcoin is risky for those same reasons.

Because it is not backed by a central bank or government, it is more volatile and not insured for loss, he said.

Gonzales said the most important thing an individual or business can do is research and learn about Bitcoin before investing.

For more information on the workshop or to register, visit tennesseebitcoin.org/register.

Contact Michelle Willard at 615-278-5164 or mwillard@dnj.com. Follow her on Twitter @MichWillard.

FYI ...

Things to consider about digital currency:

• Virtual currencies are volatile in value.

• Virtual currencies can be stolen or otherwise subject to loss.

• Virtual currencies have been connected to criminal activities.

• Virtual currencies and companies dealing in virtual currencies may or may not be regulated.

• Virtual currency transactions may be taxable.

For more information, go to http://www.irs.gov/uac/Newsroom/IRS-Virtual-Currency-Guidance.

Source: Tennessee Department of Financial Institutions