Bitcoin ATM Unveiled on Capitol Hill in Washington D.C.

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Despite skepticism surrounding the security of the federally unregulated Bitcoin digital currency, company Robocoin unveiled to members of U.S. Congress what it considers the 'Bitcoin's first ATM'.

"Bitcoin is a digital, decentralized digital virtual currency, and Robocoin is the easiest way for people to buy and sell Bitcoin with cash," said Robocoin CEO Jordan Kelley.

At least two lawmakers attended a media event held on Capitol Hill Tuesday, which Robocoin used to demonstrate how money could be withdrawn from the ATM.

But Democratic Congressman Hank Johnson said he's skeptical about the currency.

"Yeah I've got a healthy dose of skepticism, but it's positive skepticism. Things are always changing, and we're living in a global economy now. And what I see with this Bitcoin phenomenon, it looks like the advent of some form of global currency, and the use of the currency appears to be economically advantageous to those who are using it to trade, because of the lack of fees that are associated with internet-based transactions as they stand now," Congressman Johnson said.

The potential for Bitcoin to mask illegal financial transfers has already caught the eye of the U.S. Justice Department.

"More than ever before, the Department's law enforcement today must connect with new and emerging technology, including currencies, such as Bitcoin. Virtual currencies can pose challenges for law enforcement, given the appeal among those seeking to conceal illegal activity, and this potential must be closely considered," U.S. Attorney General Eric told House Justice Oversight Committee hearing.

The use of electronic currencies has captured the attention of regulators who have been unsure how to react to their growing use instead of government-issued money.

Federal prosecutors have warned that the currencies are vulnerable to use for money laundering, and have charged the operators of several Bitcoin exchanges over their alleged roles in helping drug traffickers and other criminals move funds.

Agencies ranging from the New York bank regulator to the Commodity Futures Trading Commission have been studying electronic currencies to determine whether and how they should be regulated.