‘BitLicenses’ for Bitcoin businesses? New York state debates legal framework

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‘BitLicenses’ might be the beginning of the development of a special framework that could, in a near future, regulate Bitcoin in a proper way. This is the name of the licenses the New York State Department of Financial Services (NYDFS) is considering issuing for companies in the business of virtual currency money transmission.

The department expects to discuss this possibility in a future hearing about virtual coins, whose date is yet to be determined, according to Coindesk. A recent document released by NYDFS confirmed the “public hearing will review the interconnection between money transmission regulations and virtual currencies”.

“Additionally, the hearing is also expected to consider the possibility and feasibility of NYDFS issuing a ‘BitLicense’ specific to virtual currency transactions and activities, which would include anti-money laundering and consumer protection requirements for licensed entities”, the statement added.

It is important for regulators to balance both allowing new technologies and industries to flourish, while also working to ensure that consumers and our country’s national security remain protected.

The department is taking this issue very seriously, but apparently in a positive way. This initiative could turn NYDFS into one of the leading North-American regulatory bodies in the Bitcoin field.

In the last few days, with the rise of cryptocurrency’s price, several scams and thefts have rocked the community. “Virtual currencies may have a number of legitimate commercial purposes, including the facilitation of financial transactions. That said, NYDFS also believes that it is in the long-term interest of the virtual currency industry to put in place appropriate guardrails that protect consumers, root out illegal activity, and safeguard our national security”, the letter explains.

Reacting to the debate, Marco Santori, chairman of the Bitcoin Foundation’s Regulatory Affairs Committee, said that the “intention to develop specifically-tailored requirements for digital currency businesses” should be applauded. “But we should be skeptical given New York’s scattershot, undiscriminating approach to its recent subpoena campaign”, the lawyer warned.

New York State Department of Financial Services (NYDFS) is considering issuing

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Maria Santos

Maria is an experienced journalist currently living in the UK. She has been writing about Bitcoin and the altcoin universe since 2013. She is also a member of the Lifeboat Foundation's New Money Systems Board and a big cryptocurrency supporter.

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