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.