New York proposal will make it easier to set up crypto businesses

The state’s financial regulator is seeking public input regarding proposed new licensing rules for companies planning to engage in cryptocurrencies

Last Wednesday, New York’s financial regulator proposed new licensing rules that would make it easier for businesses to start engaging in cryptocurrencies within the state.

The New York State Department of Financial Services (DFS) announced this news in a press release and will be accepting public input on the plan up until August 10. This initiative started with the “actual or perceived hurdles” that firms face in securing a “BitLicense” in the state, which was unveiled in 2015.

The state’s proposed framework would allow companies that want to start any virtual currency business activity in the state to secure a conditional license — through which they would then be able to collaborate with fully licenced companies.

In 2015, New York introduced the BitLicense and its initial framework. It was one of the first states to entertain the idea of regulating virtual currencies, while other regulators were still skeptical of its value. Today, these currencies are now part of a broader emerging industry that combines the finance sector and the tech sector; something that leading financial centres around the world are keen on developing.

However, many virtual currency companies have raised concerns that the process of obtaining the current BitLicense can often take years. Since 2015, the state has only given 25 virtual currencies licenses and charters.

In addition to this proposal, the regulator announced a series of other virtual currency initiatives. The DFS also issued guidance on finalising proposed self-certification regimes for coin listings, additional resources to help currency market participants navigate DFS requirements, and the signing of a landmark MOU to launch a virtual currency program.

Linda Lacewall, the Superintendent of Financial Services, stated that a partnership between the DFS and the State University of New York (SUNY) would help make this virtual currency program a reality.

“This MOU with SUNY is a strategic step to diversify and deepen the next wave of innovators in the virtual currency space in New York,” Superintendent Lacewall explained.

“The DFS actions announced today in consultation with numerous industry participants and the public will boost responsible innovation and help get New York’s economy back on its feet.  DFS is proud to foster accessibility and will continue to blaze a trail in the virtual currency marketplace.”

The program, named SUNY BLOCK, will support virtual currency entities from local communities.