New York State’s Superintendent of Financial Services Benjamin Lawsky has revealed plans to introduce a less onerous "transitional" BitLicense for cryptocurrency startups.
Speaking at the Money20/20 conference, Lawsky said that he has listened to concerns from startups worried that they simply do not have the resources to meet the upcoming New York State Department of Financial Services BitLicense requirements.
Firms could be able to apply for a transitional version of the license that will let them operate within a more "flexible framework" for a set time. When deciding whether to grant this, the regulator will look at factors such as consumer risk a company presents, the volumes it deals with, and whether it has risk-mitigating things such as insurance in place.
Lawsky says that he is considering setting up a dedicated team within the NYSDFS to deal with virtual currency startups applying for these licenses and also reiterated that individual users, software developers and bitcoin miners will not be subject to the regulations.
He also confirmed that the BitLicense rules will include tougher cyber-security requirements than traditional financial institutions face. He makes no apology for this, saying that the rules will actually serve as a model for stricter upcoming regulations for banks.
The BitLicense proposals are still in the drafting stage. A new version will be presented in early December, which will prompt another 30 day consultation period before the final document is published early next year.
Lawsky was broadly positive about the benefits of virtual currencies - including cheaper and more frictionless transactions - and urged bitcoin firms to come to New York and work within the system, rather than running to the "darkest corners" of the world.