Following the June 3 release of the final NY BitLicence, many FinTech startups face increased scrutiny, but the new ruling excludes rewards programs, which has been a boon for RibbitRewards.
#bitlicense to exclude rewards programs. Full speed ahead for @RibbitRewards the first global rewards program built on blockchain tech! $RBR— Ribbit.Me (@RibbitRewards) June 3, 2015
Cointelegraph spoke to Sean Dennis, CEO and co-founder of “the first rewards program built using blockchain technology.” He said:
“[S]ince the BitLicense was released, the exclusion is a huge deal. We were hoping for it from the beginning, and now it is set in stone. The big companies have started calling again which is great.”
Despite widespread fears about the effects of the BitLicense, the final reaction by some in the community has been positive. For RibbitRewards, the certainty of having the final BitLicense published has been both a relief and a boost to conversations with potential investors and clients. Dennis says:
“[W]e have been in talks with a number of Fintech and large players within the Loyalty points industry, and this has really helped invigorate interest and confidence to go forward with us. People have been waiting to see what the ruling would be and now they want to move forward, which has been great. We need to recruit to keep up, so it’s a great problem to have!”
The specific text of the new law that exempts rewards programs can be found in Article P section 2, which states:
“Digital units that can be redeemed for goods, services, discounts, or purchases as part of a customer affinity or rewards program with the issuer and/or other designated merchants or can be redeemed for digital units in another customer affinity or rewards program, but cannot be converted into, or redeemed for, Fiat Currency or Virtual Currency.”
Digital currency businesses that do fall under the requirements of the BitLicense, however, fear that the NY regulations will be looked upon by other states as a model for how to approach regulation. The U.S. has become an increasingly difficult place for such businesses to operate, requiring state-by-state regulatory approval for those who deal in fiat-to-digital-currency transactions. Some companies, such as Coinapult, have even chosen to close their U.S. office and relocate.
Dennis says he sides with those in the industry who seek the clarity that legislation can bring. He said:
“Regulation is inevitable, and some concrete rules were necessary in my opinion. All of us in the space have been operating not knowing what the rules are or will be, which creates a lot of uncertainty, and often extra costs which can hurt a startup. Although a lot of these regulations may not be what we wanted in the space, and there are needs for change down the line, it gives everyone a platform now to go forward with.”