Lawsky announces changes to proposed bitcoin regulations
A week before Christmas, Benjamin M. Lawsky, Superintendent of the New York Department of Financial Services, has announced new revisions to proposed BitLicense regulations.
In delivering the keynote address at a Washington DC event titled "Payments Policy in the 21st Century: The Promise of Innovation and the Challenge of Regulation," hosted by the Bipartisan Policy Center, Lawsky addressed the regulation of bitcoin as well as other new payment technologies.
More than 3,700 public comments were made to the initial BitLicense proposal, which was released earlier this year.
"In a new area like this, with very complex issues, it's very important for regulators to listen and see where the regulations makes sense -- and course-correct where necessary," Lawsky said.
Key revisions included:
- A clarification on who will not be required to obtain a BitLicense: software developers; virtual-currency miners; individual users; and individuals investing in virtual currency.
- Also not subject to BitLicense requirements: merchants accepting virtual currencies as payment for goods and services, as long as they're not engaging in other virtual-currency activity, Lawsky said. Customer loyalty programs, rewards and gift cards denominated in fiat currencies would be excluded from the BitLicense requirement.
- For virtual-currency startups and small businesses, the revised regulations would offer a 2-year transitional BitLicense ".to help provide startups an on-ramp as they build up their operations." Lawsky noted, however, that the firms would still be required "to meet robust standards for consumer protection and provide safeguards against money laundering."
- The requirement that licensees obtain address and transaction data for all parties has been dropped; and the record-keeping requirements reduced from 10 years to 7 years.
The full revised regulation text of the new BitLicense proposal will be uploaded on the New York Department of Financial Services website in the coming days, Lawsky indicated. After an additional 30 days for more public comments, the regulations will likely be finalized in early 2015, he said.
In addition to virtual currency, Lawsky also addressed payments technology in his keynote address, referring to the current ACH system as "our current disco era payment system."
Lawsky's keynote was preceded by a panel addressing other components of payments. The panelists included: Cyrus Amir-Mokri, Partner, Skadden, Arps, Slate, Meagher & Flom LLP (and former Assistant Secretary for Financial Institutions, U.S. Department of Treasury): James Chessen, Executive Vice President and Chief Economist, American Bankers Association; Jeanne Hogarth: Vice President for Policy, Center for Financial Services Innovation; and Robert Hunter: Executive Managing Director and Deputy General Counsel, The Clearing House.
A video of the entire Lawsky keynote as well as the panel discussion can be found here.