NY Financial Watchdog Calls For Easier Introduction Of Virtual Currency

The New York State Department of Financial Services (DFS) is proposing revised rules for the listing of new virtual currencies and will review the state’s BitLicense, the regulator announced in a press release on Wednesday (Dec. 11).

DFS Superintendent of Financial Services Linda A. Lacewell said the new rules are the first steps in the revision of New York’s BitLicense to better meet the numerous changes in the industry since 2015.

“New York is the center of both innovation and consumer protection, and the department must strive to deliver speed to market and continually adapt to keep pace as the financial services industry continues to rapidly evolve,” said Lacewell.

She added that the goal is to make it easier “for those who have obtained a New York license to periodically add new coins to their existing products.”

DFS is asking for input from the public – particularly anyone involved with virtual money –regarding two planned modifications that influence coin listings.

One change is that any coins the regulator approves for listing in New York can be listed by any exchange that operates in the state, as long as they provide notice to DFS. The other change is that the regulator will publish a model framework for coin listings and that exchanges should model their versions around it.

Comments are due on Jan. 27. DFS will release final guidance after comments are reviewed.

BitLicense was introduced in New York in 2015, at a time when other regulators were suspicious of electronic money. Those virtual currencies are now part of a fast-growing FinTech market that financial centers want to attract, Reuters reported.

The DFS has issued 24 licenses and charters to virtual currency firms since 2015. Some want to list additional coins along with those approved by the agency.

In October, DFS first started taking a closer look at BitLicense, which requires all companies that process cryptocurrency transactions with New York residents to be licensed, even if the firms are based outside the state. The license is unpopular with crypto firms.