On December 18, New York State Department of Financial Services (DFS) Superintendent Benjamin Lawsky delivered remarks on the revised BitLicense framework at the Bipartisan Policy Center in Washington, DC. If adopted, the proposed BitLicense framework would regulate and license companies performing virtual currency business activities. Superintendent Lawsky explained that the changes to the BitLicense framework were intended to provide additional flexibility to virtual currency firms while maintaining consumer protection. 

Noting several potential benefits of virtual currencies such as Bitcoin, Superintendent Lawsky clarified that the BitLicense is intended to apply only to virtual currency businesses that are operating as financial intermediaries. He further stated that the proposed framework was intended to subject those virtual currency firms to the same examinations, anti-money laundering, accounting or recordkeeping standards as other financial institutions. 

Addressing vocal comments concerned with the cost of compliance on start-up businesses, Superintendent Lawsky stated that a two-year transitional BitLicense will serve as an “on-ramp” for start-ups focusing on building their virtual currency enterprises. Other changes include broadening the range of financial assets that may be counted for capital requirements and reduced requirements with respect to recordkeeping and identification of third-party counterparties in virtual currency transactions.

Superintendent Lawsky stated that the new BitLicense framework will be published on the DFS website in the coming days. He also referenced and noted the concurrent actions of the Conference of State Bank Supervisors (CSBS), but clarified that the model regulatory framework released by CSBS was separate and apart from the proposed BitLicense. 

Click here to read Superintendent Lawsky’s remarks.