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What is BitLicense and how does it affect Bitcoins

Over the past few days you might have heard of this new “BitLicense” the license which started as a proposal on popular social sharing website Reddit where Ben Lawsky, Superintendent of Financial Services at the New York State Department of Financial Services (DFS) announced what is now known as the BitLicense proposal

What is BitLicense

The Bitlicense document contains a regulatory structure for Bitcoin which means that businesses in the state of New York can be sure of what they can and cannot do. This has been done to make it easier for businesses to legally accept the cryptocurrency and has been done to encourage small business owners to accept Bitcoins.

Is the BitLicense a finalized document?

As of July 24, the state of New York has given the Bitcoin community 45 days to give feedback on the document. The DFS understands that Bitcoin is a community effort and is trying to involve the community into developing the document which you can fully read here the community has responded by making little improvements and posting it on Github. Here is a summary of “issues” people have found in the document

Do i need my own License? Who does it apply to?

Any company or person which is resident in New York. “Entities chartered under the New York Banking Law that have existing licenses to conduct exchange services are allowed to engage in Virtual Currency Business Activity.” the document also states that:

“merchants and consumers that utilize Virtual Currency solely for the purchase or sale of goods or services are exempt from licensing requirements

Will my state make its own Bitcoin license?

We will most likely see other states follow New York’s method, as of now the initiative has been a great success, specially because of how  Ben Lawsky approached the community to make sure they were OK with the regulations. Once the document is released and the first businesses start to make use of it, we expect many more states to introduce their own license in the next couple of months.

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nielsbosch

About the author nielsbosch

Hello, my name is Niels Bosch and i am the founder of AmongTech. Currently living in the South of Spain. My main interests are web development, playing video games once in a while, Apple, Marketing and SEO. I am currently studying Business administration, Ne Read More

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3 comments on “What is BitLicense and how does it affect Bitcoins
  1. Incorrect. This legislation is overreaching. It encompasses any business in the world wishing to business with bitcoin. This regulation should be rejected or it will be a failure because it won’t be followed.

  2. “….specially because of how Ben Lawsky approached the community to make sure they were OK with the regulations.” Do you mean communities like Reddit, one of many which are not happy with this whatsoever?

  3. Underwun on said:

    Wrong Wrong Wrong.

    The man is a public servant seeking approval from those he is charged to protect.

    I’ve lived and worked in these circles with offices on Wall Street. Lawsky is using his moment in the spotlight to align himself with his masters.

    Dining with Jamie Dimon and others he has hatched a plot in order to contain the threat Bitcoin represents.

    If negotiation follows he presents himself as the arbitrator when in fact all along his goal was to end this threat once and for all.

    Negotiation must not happen and he must be called out for his loyalty to the bankers. We must scream not negotiate, any and all negotiation will only validate his equinimity when in fact he has none.

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