Virtual currency isn’t just the subject of social media memes, nor is it just a way to make money fast.

The U.S. Senate Committee held a meeting to discuss virtual currencies on Feb. 6 in which the prominence, function and risks of this new technology were brought to the forefront.

“Virtual currencies, Bitcoin especially, have captured the attention of investors and speculators and computer programmers and regulators all over the world,” said Senator Sherrod Brown.

The quick and immense rise of the general public’s interest in virtual currencies is undeniable, and people are investing like crazy. Like any progressive technology, there is a fair number of involved innovators as well as skeptics.

“Understanding the risk of new technology is no easy task,” said Brown.

The main goal of the meeting was for the Senate members to understand virtual currencies better and discuss responsible actions moving forward.

Jay Clayton, chairman of the U.S. Securities and Exchange Commission (SEC), was the first witness to testify in front of the Senate Committee. He began by discussing what virtual currencies are and how they work.

“I break this space into three categories: First, a promising new technology referred to as distributed ledger technology or blockchain. Proponents of this technology assert that it will bring great efficiencies to our national and global economies,” Clayton said.

He went on to explain how he has high hopes for the positive potential of virtual currencies and blockchain technology before diving into the rest of the space.

“The second and third categories are cryptocurrency and ICO’s (initial coin offerings). One is promoted to be a replacement for dollars; the other is like a stock offering,” Clayton said.

He expressed that there needs to be great caution taken when participating in the investment and trading of virtual currencies. Some ICO’s are fraudulent and simply capitalizing on the miseducation of some inexperienced investors.

Investors must spend the appropriate time researching different cryptocurrencies and the background of a company before accepting an ICO or investing in the market.

“There are many problems with the way ICO and cryptocurrency markets are operating,” Clayton said. “The market for these products have substantially less oversight than our traditional securities markets.”

He also touched on how some ICO’s are being conducted illegally and not following the U.S. Securities and Exchange Committee’s securities laws. He expressed to the committee that the SEC will continue to enforce laws regarding ICO’s and other aspects of virtual currency and include private rights of action.

“I stand ready to work with Congress on these issues,” Clayton said.

J. Christopher Giancarlo, chairman of the United States Commodity Futures Trading Commission (CFTC), then addressed the committee from a different point of view.

“I’m the father of three college-aged children,” Giancarlo said. “During their high school years, we tried to interest them in the financial market. My wife and I set up small brokerage accounts with a few hundred dollars that they could use to buy stocks. Yet, other than my youngest son, who owns shares in a video game company, we haven’t been able to peak their interest in the stock market. I guess they’re not much different than most kids their age.”

However, virtual currencies have become a hot topic on social media among millennials, and people aren’t only talking about it--they’re also making some of their first investments.

“Something changed in the last year,” Giancarlo said. “Suddenly they were all talking about Bitcoin. They were asking me what I thought, and should they buy it.”

There has been a shift in the way people, specifically younger individuals, are viewing their money. Instead of saving up for their dream car or buying the hottest new clothes, young people are investing their money in virtual currencies with hopes to hit big. Bitcoin and other cryptocurrencies have suddenly become the hottest trend to be a part of.

“It strikes me that we owe it to this new generation to respect their enthusiasm about virtual currencies with a thoughtful and balanced response, not a dismissive one,” Giancarlo said.

However, with enthusiasm can sometimes come greed and ignorance, as Giancarlo then mentions. He explains the importance of cracking down on those who are abusing this new enthusiasm to scam and trick young investors.

“We must make good policy choices and put in place sound regulatory frameworks to reduce risks for consumers,” Giancarlo said.

He outlined several elements that will need to be implemented to best regulate this new technology.

The elements include becoming well educated on virtual currencies, putting things into perspective and realizing the potential for expansion, informing the public and educating consumers, coordinating with other government agencies, exercising legal authority over derivatives on virtual currencies and tough enforcement.

“There’s a lot of noise around virtual currencies, and regulators must help set the record straight,” Giancarlo said.

The CFTC has created several resources to properly educate the public on virtual currencies, including written statements, podcasts, webinars and a dedicated Bitcoin website. They’ve also scheduled in-person discussions with libraries and briefings for seniors.

“We’ve never conducted this much outreach for any other financial product,” Giancarlo said. “These markets are new, evolving and international. They require us to be nimble and forward-looking.”

Senator Mike Crapo was the first to question the ability of both the SEC and CFTC to properly regulate this technology since neither agency currently has full jurisdiction over cryptocurrency.

“The question I have is whether you have sufficient jurisdiction,” Crapo said. “Should Congress address revising and refining our financial law so that one agency or a group of agencies have complete jurisdiction?”

Giancarlo responded by mentioning how there is a patchwork, but not a comprehensive structure, for dealing with virtual currencies and the cryptocurrency market and that a further policy discussion needs to be had.

The challenge of dealing with global markets is another aspect of this technology that leaves many uneasy, but many markets are now global in the 21^st century due to the rise in internet use worldwide. It’s no longer unusual to engage in a global market, even if it may propose challenges when dealing with foreign bodies, as Giancarlo explained.

Senator Mark Warner related cryptocurrency and blockchain technology to the early growth of the mobile phone and expects a similar path for virtual currencies.

For the virtual currency market to integrate into the financial market, there will have to be an approval and cooperation from government and banking agencies.

Only time will tell how the SEC, CFTC, and other government and banking agencies will choose to integrate this progressive market into the everyday lives of consumers and investors. However, it seems that it’s heading in that direction, and virtual currencies are here to stay.