Treasury chief skeptical of Bitcoin ‘phenomenon’

Treasury Secretary Jack Lew said Thursday the government needs more time to explore the effect of bitcoin, a virtual currency.

“Bitcoin is a phenomenon that we need more time to discuss. I’ve talked to [JPMorgan CEO] Jamie Dimon about it, and he and I both share some incredulity about the whole phenomenon,” Lew said on CNBC Thursday during his visit to the World Economic Forum in Davos, Switzerland. [WATCH VIDEO]

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Bitcoins are strictly an online currency, and its owners are largely anonymous. No central bank regulates or backs them. They can be used to purchase goods and services, and can be traded for cash.

Lew’s skepticism comes just a few months after a Treasury Department official told a Senate panel that bitcoin is a legitimate currency and should not be banned. 

In the interview Thursday, Lew warned the government must ensure the currency is not used to help terrorists.  

“I think from the government’s perspective, we have to make sure it does not become an avenue to funding illegal activities or funding malign purposes like terrorist activities," he said. "It is an anonymous form of transaction, and it offers places for people to hide.”

The Treasury Department in the meantime, Lew added, has made it clear through enforcement actions that they will make sure existing rules apply to illegal money activity online.