Benjamin Lawsky addressed the changes to the proposed BitLicense, during a panel discussion on digital currencies and regulation at Cardozo Law School in New York City Tuesday evening.

In his remarks, Mr. Lawsky, the superintendent of the New York State Department of Financial Services, outlined several changes he will make to the proposal – a special banking license introduced by his agency in July to regulate virtual currencies.

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The comments appeared to be his first detailed public comments he has made on the proposal.

Software developers, bitcoin miners, and individuals (unless they also offer financial services) doing business in New York state won’t have to apply for a BitLicense, he said, according to the prepared remarks, but traditional banks looking to get into digital currencies will.

The proposal was meant as a starting point, not an ending point, he said, but it was also influenced by the collapse of the Mt. Gox exchange.

“The virtual currency industry is at a bit of a crossroads regarding whether it will become an important part of the future financial system,” he said.

“At DFS, we’re committed to proceeding thoughtfully since virtual currency could ultimately have a number of benefits for our financial system.”

He emphasized, however, that if companies want to provide financial services via digital currencies, they are going to have to accept some measure of regulation.

“When it comes to safeguarding customer money at a financial company – and unregulated world of caveat emptor has never been a sufficient answer,” he said.

The current open-comment period is slated to end this month, and Mr. Lawsky said that the DFS will release an amended version of the proposal that itself will be put out for public comment.

“Suffice it to say,” he said, “there is and will be a significant amount of time for stakeholders to provide input.”

He addressed several concerns and outlined some of the changes he expects to make, including a key complaint that the proposal be “technology neutral.”

Mr. Lawsky said that the license will not cover software firms, something he noted in August, or mining companies, but also said “we cannot stick our heads in the sand about the the fact that – when it comes to consumer disclosures, capital accounting, and other issues – there are real differences between fiat currency and virtual currency.”

It will cover any company that wants to offer financial services via digital-currencies, whether it’s a start-up, tech company, miner, or traditional bank, he said.

He said the department is aware of complaints about the cost of compliance, especially on how it will affect start-ups.

“This is a difficult issue,” he acknowledged. “It requires a creative solution and we are working on that issue.” But these costs, whether for a start-up or a multinational, are ultimately a cost of the business of financial services.

“Again, that is the basic bargain of financial services regulation. We do not, for instance, let someone run a bank out of their garage.”

We wonder how consciously he chose that metaphor, knowing how many Silicon Valley start-ups, going all the way back to Hewlett and Packard, did, in fact, start in a garage.