The most anticipated set of guidelines for early 2015 is certainly New York’s BitLicense. Any day now, New York is slated to release yet another version of its proposed regime for public comment. In the spirit of college style last-minute exam cramming, let us catch you up on the story so far. (Don’t worry, we won’t quiz you after.)
What Is It?
The BitLicense is a comprehensive regulatory regime that would govern virtual currency businesses engaging in certain types of activity in NY.
- Superintendent Benjamin Lawsky – head of the New York agency tasked with promulgating the BitLicense regime.
- New York’s Department of Financial Services (NYDFS) – the agency that will authorize the BitLicense.
The refrain, perhaps too obvious when said aloud, is that this is state regulation of virtual currency businesses, with a special emphasis on regulating money transmitters. This regime is borne of a New York State agency, authorized by a New York State regulator.
Although the federal government also governs certain virtual currency businesses involved in money transmission, states generally have a separate set of rules that money transmitters must follow.
The BitLicense takes on national importance given that it is the first of its kind, and that at least one organization has floated a similarly-drafted regulatory model designed to help other states determine how to regulate virtual currency businesses.
Timeline of Key Events
- July 2014, NYDFS released its list of proposed rules and regulations, called BitLicense Regulatory Framework.
- August 2014, NYDFS extended the comment period an additional 45 days.
- October 2014, the comments period closed with 3,748 submitted comments, each made publicly available in December.
- December 2014, Superintendent Lawsky announced a revised framework for the proposed BitLicense, to be revealed in early 2015.
The Story to Come
To date, then, we only have half of the plot. Time will tell the rest: after NYDFS reveals the new framework, there will be an additional 45-day comment period, to be followed by an additional waiting period before the regulations likely take final form.