July 17, 2014

Mercatus Scholar Jerry Brito Reacts to NY Financial Regulator's Draft of 'BitLicense' for Bitcoin Businesses

Jerry Brito

Former Senior Research Fellow
Summary

The New York Department of Financial Services released a draft proposal today for licensing and regulating virtual currency businesses, like Bitcoin. Mercatus scholar Jerry Brito reacts to their “BitLicense” proposal at The Technology Liberation Front, noting that while New York is on the right track, there is room for improvement.

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The New York Department of Financial Services released a draft proposal today for licensing and regulating virtual currency businesses, like Bitcoin. Mercatus scholar Jerry Brito reacts to their “BitLicense” proposal at The Technology Liberation Front, noting that while New York is on the right track, there is room for improvement.

Read the full post here and find excerpts below:

"The definition of who is engaged in 'virtual currency business activity,' and thus subject to the licensing requirement, is quite broad. It has the potential to swallow up online wallet services, like Blockchain, who are merely providing software to their customers rather than administering custodial accounts."

"In order to grow and reach its full potential, the Bitcoin ecosystem needs regulatory certainty from dozens of states. New York is taking a leading role in developing a regulatory structure and the path it chooses will likely influence other states. This is why we have to make sure that New York gets it right."