Benjamin Lawsky Released The Final BitLicense, The New Regulatory Framework For Bitcoin At BITS Forum.Final version of BitLicense clearly shows a divisive turning point in US bitcoin regulationThe final version of the long- awaited regulatory framework for digital currencies were released on 3rd of June, 2015, by the New York State Department of Financial Services (NYDFS).
NYDFS whose responsibilities generally include oversight of money transmitter like firms that transfer and take custody of the money, is the first agency in the world to take an attempt on regulating the complex, at times startling the world of digital currency.Ben Lawsky, the superintendent of New York’s Financial Services Department has been revising the framework for over a year.But the comments made by the some of the members of the bitcoin and digital ecosystem were quite unsatisfactory.Some commented that it was far from perfect, others that it was poorly fitting.
After two years of fact- finding and debate, the final version was released, it was not at all surprising that the comments mostly focus on the sharp disconnect between headlines touting the regulation as milestone achievement and the reaction of those who are affected by its provisions.Even if the BitLicense is successful at “legitimizing” the bitcoin industry, it is quite clear that its participants were after something more like a chance to innovate this sector, so that it can flourish in a way that they feel is more in line with the permissions given to the past emerging technologies.Jerry Brito, the executive director of Coin Center, the nonprofit research group which have vowed to mobilize its resources to stop regulation, stated, “The only consolation is that now businesses have clarity on some other obligations. It’s a mixed bag, is the best that can be said about the BitLicense.”Even though Brito’s remarks were quite typical, questions were asked about the private key custodianship, about the lack of specificity and stated that Coin Center took aim at the BitLicense for being too technology- specific.
Representatives from the technology’s business community expressed their disappointment, but implied that they would look forward to work with the NYDFS as it seeks to carry out the provisions of the BitLicense.Others such as Jeremy Allaire, the CEO of Circle, took a more balanced tone. Allaire stated, “When the first draft of the BitLisence emerged, at the point in time, we were outspoken in what our concerns were. Some specific provisions that were technically impossible for us to comply with, so we either had to stop using bitcoin or see that changes were made.”Yet, after receiving all the media attention, the BitLicense has arguably already succeeded at casting the industry in a more positive light.A spokesperson stated, “As we consider how we want to approach virtual currency, we have closely followed regulatory developments in New York and elsewhere.
We will analyze the rules unveiled today as we continue our deliberations.”In the wake of the Department of Financial Services’ just-released regulations regarding the operation of cybercurrency businesses in New York state, Perianne Boring, the president of the Chamber of Digital Commerce, issued the following statement:“New York is the first state to put forward regulations for virtual currencies and virtual currency activities, but it definitely will not be the last.With the NYDFS Superintendent Ben Lawsky leaving his position in a few weeks, it’s imperative to have regular and frequent reviews of regulations.“New York’s final BitLicense regulations are not perfect. The most worrisome aspect is the lack of a clear on-ramp for digital currency startups and small businesses, especially in the likelihood that other states will use New York’s BitLicense as a guideline in creating their own regulations.
“With multiple states looking to regulate digital currencies, the industry is facing an increasingly complex and burdensome regulatory environment. It is imperative that the industry’s voice is heard in discussions among policymakers to ensure what ultimately becomes law does not impede innovation.“It is going to require the participation from all areas of the digital asset community (companies, individuals, investors, universities and other advocacy organizations) to put together a legal framework that best serves the ecosystem – one that fosters innovation, jobs and investment“Without proper engagement, we risk a patchwork of inconsistencies and friction between local, state, federal and international laws.
