This blog has offered several pieces on payments systems and currencies because of the potential they have to disrupt traditional banking and to elicit rearguard actions on behalf of the industry.

On July 3, Drew Breakspear, commissioner of the Florida Office of Financial Regulation and a member of the Emerging Payments Task Force of the Conference of State Bank Supervisors, a trade association that represents the regulators of state-chartered banks, appeared on C-SPAN's Washington Journal and was interviewed by Steve Scully.

Scully began the interview by citing statistics from bankrate.com that 40 percent of Americans carry less than $20 cash on a daily basis, preferring to rely on bank cards and mobile payment apps, and 9 percent don't carry any cash at all. (Bill Clinton was famous for reportedly not carrying any cash when he played golf, so that someone else would have to pay, or more probably, the management would comp him.) This is evidence that the country is moving to a "cashless" society.

Asked about bitcoin, Breakspear defined it as a virtual currency that is being used to buy apartments in Amsterdam, cars and meals. He stated repeatedly that "Bitcoins are here to stay and they're going to grow."

Scully read from a Wall Street Journal article that the Russians are reconsidering their early vow to crack down on bitcoin. Breakspear responded that the Russians are recognizing that virtual currencies are here to stay, and he hastened to add that bitcoin is just one of anywhere from 10 to a hundred virtual currencies, despite the fact that they don't have the backing of a central bank and might lack traditional consumer protection.

Scully played a clip from a Senate Banking Committee hearing that showed Federal Reserve Chair Janet Yellen, responding to a question from Sen. Joe Manchin, D-W.V., urging Congress to consider what the right legal structure would be for virtual currencies that involve nontraditional players that aren't regulated because there is no central issuer or operator to regulate.

Breakspear pointed out that there is a Bitcoin Foundation, but noted that one of the purveyors was broken into and $400 million worth was stolen. The Foundation's mission is "to standardize, protect and promote bitcoin." Breakspear stated that the value of bitcoins has fluctuated from $20 at the outset to about $1,000 at the high and now stands at approximately $600.

In response to a caller, he noted that while bitcoin has no backing other than the credibility of the issuer, that's also true of many currencies. Also, the transaction cost of exchanging bitcoins is less than for exchanging currencies of another country, and it has the additional attraction of anonymity for the payer.

Scully asked Breakspear what advice he would give people who have become dependent on mobile devices for much of their daily routines, and he asked further what regulation might be needed.

Breakspear responded that they should be careful to make sure that any charges are in fact authorized, and regulation should protect consumers, but be sure not to stifle innovation.

(Archived video can be found here.)