After nearly two years of ongoing discussions and drafting, Ben Lawsky’s BitLicense has arrived. Photo: Ben Lawsky
New York Superintendent of Financial Services Ben Lawsky has released the final version of BitLicense, sweeping new rules regulating digital currencies.
Lawsky, who is stepping down as Superintendent at the end of the month, announced the release during his speech in Washington at the BITS Emerging Payments Forum.
BitLicense is necessary because “state money transmission rules date back to the Civil War when there was barely mass communication, let alone the Internet,” he said, adding that “digital currency was unlike anything we had ever seen.”
Lawsky went on to echo a long held sentiment—that regulations done right have the power to not only protect society but also legitimize a burgeoning industry in the eyes of businesses and investors by providing clarity. The understanding, of course, is that this should not be achieved at the expense of innovation.
This perspective also reflects the one held at Ripple Labs. As such, we’ve been an active participant in the two-year process in which BitLicense was developed. You can read our letter and comments on earlier drafts of the rules here.
— Ben Lawsky (@BenLawsky) June 3, 2015
As Lawsky admitted, it’s “a very delicate balancing act.” The final version of BitLicense represents a more moderate version of last year’s initial draft. Reports Michael Casey of the Wall Street Journal:
Running through five industry concerns with the BitLicense process, he said the final rules won’t require approval for standard software updates—only material changes to technology—and will only regulate intermediaries with custody of customer funds, not software developers. He said licensees that want both a BitLicense and a traditional money-transmitter license won’t have to duplicate the application process, and that there will be no need to file “suspicious activity reports,” or SARs, when these anti-money-laundering actions have already been handled by the U.S. Treasury Department’s Financial Crimes Enforcement Network, or FinCEN. Finally, investor changes will only require approval when an investor gains control over the management and policies of the firm.
As one of the first pieces of major regulatory frameworks encompassing digital currencies and their associated technologies, BitLicense will likely serve as a template for regulators across the U.S.
View the final draft of BitLicense in its entirety.