Banks, Not Startups, Will Need a BitLicense in New York

Benjamin Lawksy, superintendent of financial services of New York, said on Tuesday that the state will not require developers of digital currency software to take part in its proposed licensing regime, commonly known as the "BitLicense" plan.

"We are regulating financial intermediaries. We are not regulating software development," Lawsky said in a speech at the Benjamin N. Cardozo School of Law in New York City. "To clarify, we do not intend to regulate software as software or software development. For example, a software developer who creates and provides wallet software to customers for their own use will not need a license."

The "BitLicense" plan, which is expected to unveil at the end of the month, includes proposed rules on consumer protection, the prevention of Money Laundering Money Laundering Money laundering is a blanket term to describe the process by which criminals disguise the original ownership and proceeds of criminal conduct by making such proceeds appear to be derived from a legitimate source.Money laundering is an issue that traverses countless industries and sectors, which includes the financial services space. Though criminal money may be successfully laundered without the assistance of the financial sector, billions of dollars’ worth of criminally derived money are laund Money laundering is a blanket term to describe the process by which criminals disguise the original ownership and proceeds of criminal conduct by making such proceeds appear to be derived from a legitimate source.Money laundering is an issue that traverses countless industries and sectors, which includes the financial services space. Though criminal money may be successfully laundered without the assistance of the financial sector, billions of dollars’ worth of criminally derived money are laund Read this Term, and Cybersecurity Cybersecurity Cybersecurity is a blanket term that refers to the protection of computer systems and networks from the theft.More broadly speaking, cybersecurity can also represent countermeasures against damage to hardware, software, or electronic data, as well as from the disruption or misdirection of the services they provide.It was not long ago that the term cybersecurity not exist as it was first used in 1989. In today’s vernacular cybersecurity, refers to measures taken to protect a computer or computer Cybersecurity is a blanket term that refers to the protection of computer systems and networks from the theft.More broadly speaking, cybersecurity can also represent countermeasures against damage to hardware, software, or electronic data, as well as from the disruption or misdirection of the services they provide.It was not long ago that the term cybersecurity not exist as it was first used in 1989. In today’s vernacular cybersecurity, refers to measures taken to protect a computer or computer Read this Term. When it was first conceived many in the digital currency community warned that it might hurt New York as an innovation hub as developers will flee the state if strong and costly regulations will be applied to them. This statement seems to show the states regulators understand that risk and take it seriously.

While companies that are developing wallets or other software for virtual currencies will not need a license, nor will individual users, banks will not be exempt. "The banks we regulate cannot start providing virtual currency services without prior approval from DFS (Department of Financial Services), and they will be have to comply with any requirements that are otherwise imposed on virtual currency businesses," Lawsky said.