On Wednesday, June 3, Ben Lawsky, head of the New York Department of Financial Services, released the long-awaited rules outlining the process companies must take in order to obtain a license allowing them to handle virtual currencies, such as bitcoin. Lawsky has previously claimed the “BitLicense” will only apply to financial intermediaries, and therefore will not apply to software developers, individuals users, customer loyalty programs and gift cards, currency miners, or merchants that accept the currency as payment.
In a statement at the BITS Emerging Payments Forum in Washington, DC, Lawsky notes,
Getting that balance right is hard, but it is key… We want to promote and support companies that use new, emerging technologies to build better financial companies. We just need to make sure that we put appropriate regulatory guardrails in place.”
Many suggest the barriers to entry with this license may be high. Not only does it require a $5,000 application fee, but interested companies will be assigned a compliance officer to ensure compliance with the BitLicense guidelines as well as any federal and state laws that apply. These New York rules are not to be taken lightly; as the document implies, no BitLicense, no Bitcoin.
The release of the official BitLicense document (access here) comes at a time when the technology of the system, the blockchain, is gaining increased attention on Wall Street and among other financial leaders. Most recently, startup Xapo announced the addition of three big names to its advisory board- Larry Summers, John Reed, and Dee Hock.
Read more here, “NY Financial Regulator Lawsky Releases Final BitLicense Rules for Bitcoin Firms,” (Michael Casey, The Wall Street Journal)