Lawsky Introduces Changes to Original BitLicense Proposal

New York State is proposing regulation of cryptocurrency which would require financial institutions to apply for licenses to operate virtual currency services. According to Benjamin Lawksy, superintendent of the New York Department of Financial Services, the new proposed regulation does not deal with the software component of bitcoin but is instead focused on the financial aspect of the currency. The state would not regulate individual bitcoin users, mining companies or software developers. Instead, traditional financial institutions such as banks would be regulated in how they are allowed to process bitcoin. This measure is being looked into as a method of enacting consumer protections in the new financial plane.

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

In his speech at the Cordozo Law School, Lawsky spoke of regulators concerns about the operation of virtual currency. Consumer protection in the realm of the cyber currency is a whole new ball game, with little to no existing models. Lawsky attempts to ease the concerns of bitcoin enthusiasts, stating that proposed regulations are only targeting financial service providers in order to mitigate risks for consumers. The new proposals are highly influenced by the 2014 Mt. Gox bitcoin exchange crash. Lawsky emphasized that the new regulations are meant to mitigate risks in financial services of virtual currency, similar to the regulations currently in place for fiat currencies. The proposed licensing scheme is currently open to the public for comment. Regulators plan on closing the open comment period at the end of the month. How ever the comment period goes, decisions will soon be made on the future of bitcoin in the mainstream.

 

Read More – BitBeat – Lawsky Outlines Changes to BitLicense (Paul Vigna, Michael J Casey)

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Originally from Gaithersburg, Maryland, Millan is a senior at the George Washington University studying Biological Anthropology.

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