The New York “BitLicense” proposal is most certainly controversial at the very least. There are of course many people who feel that Bitcoin should not be regulated at all and others who feel that current financial regulations can just as easily be applied to virtual currencies. But while this proposal covers merchant reporting requirements, one question still remains to be answered: Will Bitcoin software developers be required to obtain a “BitLicense”?
This question appears to have been answered based on a report released by Reuters yesterday. According to this report Benjamin Lawsky, superintendent of the New York State Department of Financial Services, software developers will not be required to have these “licenses.”
The BitLicense proposal was revealed to the public in July of 2014 and the revised proposal is supposed to be released at the end of October. Lawsky recently gave a speech at the Benjamin N. Cardozo School of Law in New York City and mentioned the issue of software developers and the requirements:
"We are regulating financial intermediaries. We are not regulating software development. 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 speech was entitled U.S. vs E.U. Surveillance Law and Government Access to Consumer Data. A CLE panel discussion on comparative surveillance law and was designed to address some of the legal issues facing the state of New York because of emerging technologies. The BitLicense was the first attempt by a state government in the United States to regulate Bitcoin on this scale.
Lawsky said that one of the problems was that the banks regulated by his department could not begin to provide virtual currency services without prior approval from the NYDFS. He also added that while independent developers and companies would not need a license, the banks will still need to obtain a BitLicense.
Lawsky has faced a great deal of criticism from the Bitcoin community about many aspects of the proposal, mainly because they believe that the requirements will stifle innovations and expansion. Lawsky continues to support the proposal, however, saying on several occasions that, while not perfect, it is a good first step. He has spoken publically on the proposal at more than a few different venues. Most recently, he was expected to appear at the Money 20/20 conference to deliver a keynote address. Money 20/20 will be taking place at Aria, Las Vegas between November 2nd and 6th.
To join the campaign to stop the BitLicense, you can send a letter to the New York Department of Financial Services today here.
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