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Lawsky proposes new rules for Bitcoin regulation in New York

New rules and regulations for Bitcoin usage in the state of New York has been announced today by Benjamin M. Lawsky, the superintendent of financial services, according to The New York Times this morning. This is a good omen for merchants who accept bitcoin payment.

Bitcoin Conference Held In New York City
Photo by Andrew Burton/Getty Images

Lawsky has been favorable toward bitcoin for merchants and exchanges in the state of New York and particularly the New York City area during the NYDFS hearings last January. He and his committee reviewed bitcoin and its transaction services for its potential. Lawsky summed up that it offered a very low price fee for sending money across borders from workers in the city and state who sent money to relatives in hard to reach areas without a centralized banking system.

An announcement was made last March that a “BitLicense” application and proposals could be made to the state financial services regulatory office. The licenses would be issued at the end of the second quarter for use.

At that time in March, Lawksy stated, “Turning a blind eye and failing to put in place guardrails for virtual currency firms while consumers use that product is simply not a tenable strategy for regulators.”

Today an announcement came from Lawsky that the “BitLicense” plan provides the first state proposal to set guidelines for virtual currency. The attention to money laundering prevention and cybersecurity in the plan is according to Lawsky, “a comprehensive framework.” His goal as he explained it in an interview to the NYT is to reach, “the whole virtual currency ecosystem.

Bitcoin exchanges and companies that hold and store bitcoin or maintain and control the virtual custody for its customers are subject to the regulations. Situations in which a merchant accepts bitcoin as payment would not need to apply for a license. Overstock.com had been the first online major store to accept bitcoin.

The rules have been balanced so they are tailored to the operating requirements of the cryptocurrency and maintain the same rules of capital requirement for holding amounts as any banking institution. The Bitcoin companies could hold some of the capital in bitcoin itself.

Now that the announcement of the new rules and regulations have been made public this morning, there is a forty-five day period from July 23 in which the public may offer proposals and statements.

Lawsky sees this as good for the future of the industry and the serious bitcoin associated entrepreneurs and merchants agree in the value of these regulations. It will make it much easier to use bitcoin and be accepted by a more confident public buyer and willing merchant.

Popularity for bitcoin transactions as payment have been growing world-wide and also in charitable contributions. Information about the new Bitcoin rules for regulation can be obtained on the New York State website.