Financial services providers in New York will need a BitLicense — but that won’t include software developers, bitcoin miners, and individual cryptocurrency users, the Wall Street Journal reported.
In July the state’s superintendent of its Department of Financial Services, Benjamin Lawsky, proposed a special banking license to regulate virtual currencies. But at a panel discussion on Tuesday (Oct. 14), Lawsky reiterated that software developers won’t need a license — something he originally said in August — and neither will Bitcoin miners or ordinary users.
But traditional banks will need a BitLicense, and so will any company offering financial services via digital currencies, including startups and tech companies. “When it comes to safeguarding customer money at a financial company, an unregulated world of caveat emptor has never been a sufficient answer,” Lawsky said in his prepared remarks.
Lawsky’s department has been receiving comments since the initial draft of the BitLicense proposal was released in July.
He said his department is aware of complaints about the potential costs of compliance, especially for startups. “We are not seeking to stifle technological innovation,” Lawsky said. “But if a software company is also taking on the responsibility of actually safeguarding customer money, it is a much more difficult calculation. Again, that is the basic bargain of financial services regulation. We do not, for instance, let someone run a bank out of their garage. And licensure and regulation often helps foster greater trust among consumers.”
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