The New York Department of Financial Services (NYDFS) has issued proposed guidance that seeks to update the terms of its crypto license.
The agency’s proposals were published on its website on Wednesday, December 11 and come five years since the introduction of the BitLicense.
The BitLicense has been a somewhat controversial license that the regulator introduced in 2015. In the intervening years, any business seeking to provide cryptocurrency and virtual currency services in the state of New York has had to first apply for and get approval from the state regulator.
But the authority now wants to review this and other virtual currency (VC) regulations. As per the press release, industry experts and the public can comment on the proposal up until January 27, 2020.
NYDFS proposes two updates
While the BitLicense remains in place, two potential updates could see changes introduced to how businesses list new cryptocurrencies.
In the first update, the NYDFS has proposed a change to its coin listing procedure. The regulator wants to set up a web-page that will list several cryptocurrencies that exchanges seeking to offer their services to residents of New York can offer. In this proposal gets approval, virtual currency businesses will be able to list certain coins without having to get prior authorization from the regulator.
The cryptocurrencies the agency has targeted for listing on its web-page include Bitcoin (BTC), Bitcoin Cash (BCH), Ethereum (ETH), and Ethereum Classic (ETC). Others are Litecoin (LTC), Ripple (XRP), Paxos Standard (PAX), and Gemini Dollar (GUSD).
The second update relates to a model framework for a policy by which platforms can list coins or provide for their adoption. Licensees would, under such a policy, be able to self-certify the listing of new cryptocurrencies. No prior approval is required where a business has a policy framework.
However, licensees will still be required to issue the DFS with a notice detailing their offering and the coin’s usage.
In this proposal, VC businesses would be able to offer new coins alongside those listed in the first proposal.
In the years since controversially introducing the regulations, 24 businesses have received the BitLicense and service charter.
Among those to receive the BitLicense are major exchange Coinbase, financial payments firm Square and Circle. Others are zero-commission trading platform Robinhood, bitcoin payment processor BitPay and a host of Bitcoin ATM providers.
But the crypto industry has evolved pretty first, meaning that updates are necessary to “reflect [these] realities” and to bring about more clarity.
In early July, the regulator announced it was creating a Research and Innovation Division. The team was meant to oversee changes to the current regulatory structure. In October, the NYDFS hired a crypto specialist in a move meant to bolster its efficiency and clarity.
The regulator expects more changes in the future as the market evolves.
Featured Image: Shutterstock