As revealed for the first time earlier today, The New York Department of Financial Services plans to give "transitional BitLicenses" to certain smaller digital currency companies seeking to do business in New York. NYDFS Superintendent Ben Lawsky gave some updates to the NYDFS's proposed BitLicense regulatory framework during his keynote speech at Money20/20. Lawsky repeated that Bitcoin software developers and individual users would not have to apply for a BitLicense.
Lawsky also emphasized that individuals miners and even large mining pools would not need to apply for a BitLicense, this has not changed despite FinCEN's updated stance on virtual currency money transmission, which has prompted one Bitcoin mining pool to announce its sale. The NYDFS plans to have a new BitLicense proposal for perusal at the beginning of December. Once the revised BitLicense is revealed, there will be another 30-day comment period, after which Lawsky anticipates bringing a "final final" draft of the BitLicense to bear at the beginning of 2015 in January.
A Transitional BitLicense
Lawsky clarified on the transitional license, and emphasized that specifics would be in the new draft:
There has to be a way for startups to start up, to play by the rules without getting crushed by huge compliance costs. to that point, we are considering creating a special type of transitional BitLicense which would allow certain small businesse and startups to operate withina more flexible framework for a set period of time. during which time tailored examinations would be conducted.
The severity of a transitional BitLicense and the difficulty to get and maintain one will depend on the virtual currency company in question and whether or not they have a federal money transmission license, state bonds, etc. The NYDFS plans to use this transitional BitLicense to lower compliance costs for the startups, a common complaint from the first draft of the BitLicense.
Lawsky admitted that the original plan for the NYDFS after their August 2013 virtual currency investigation start date was to release a proposed BitLicense regulation to the world by the end of 2014. However, Lawsky stated that the implosion of Mt. Gox, which showcased the lack of regulatory oversight in the Bitcoin world, prompted the NYDFS to move their hand sooner. Around the world, Bitcoiners are eager to see what the new BitLicense looks like.
What do you think about a Transitional BitLicense? Does it solve the problems? Comment below!
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