California officials are considering whether to regulate digital currencies such as bitcoin after concluding they have the authority to do so under existing law.

Staff at California's Department of Business Oversight have determined that the state's law governing money transmitters, which until now has been used to regulate businesses such as Western Union Co., may also apply to digital currencies, in which units of money are created and exchanged independent of central banks, said Tom Dresslar, a spokesman for the department.

"The consensus among staff is that the department and commissioner could regulate virtual currency, to some extent, under current state law," Dresslar said in a telephone interview from Sacramento. "Consumers would be the prime concern of any regulatory structure we build—making sure they are fully aware of the risks associated with virtual currency and providing effective, reasonable safeguards against those risks."