The New York state financial regulator – New York State Department of Financial Services (NYDFS), issued today its final rules for firms in the crypto currencies industry, with the main focus on bitcoin, trying to remove fears that individual wallet owners or technology entrepreneurs will have to operate under government licence.
Benjamin Lawsky, superintendent of financial services for the state of New York, said the new digital currency rules (commonly known as the “BitLicense”) would instead focus on overseeing financial intermediaries only.
“There is a basic bargain that when a financial company is entrusted with safeguarding customer 3unds and receives a license from the state to do so – it accepts the need for heightened regulatory scrutiny to help ensure that a consumer’s money does not just disappear into a black hole,” Lawsky said at the BITS Emerging Payments Forum in Washington.
“We are excited about the potential digital currency holds for helping drive long-overdue changes in our ossified payments system. We simply want to make sure that we put in place guardrails that protect consumers and root out illicit activity without stifling beneficial innovation,” Lawsky added.
As a result, the new rules would not apply to software developers, individual users, customer loyalty programs, gift cards, currency miners, or merchants accepting it as payment.
Digital currency companies would also not need prior approval from the state for updates on their software, only for material changes such as a wallet firm offering exchange services. “We have no interest in micro-managing minor app updates. We’re not Apple,” said Lawsky.
He added, “Technologists also have a responsibility of their own to meet. They cannot simply ignore the rules they do not like and try to create ‘facts on the ground.’ Generally speaking, consumer protection rules exist for good reason. Both sides, regulators and technologists, could benefit from taking a moment and trying to put themselves in the shoes of their counterpart across the table.”