According to a speech made by New York Department of Financial Services superintendent Benjamin Lawsky yesterday at a New America Foundation conference on Bitcoin, he said that the state of New York will be using existing rules that it already has in place with regard to approving licenses to digital-currency firms.
"We do not have to throw out all of our existing rules for money transmitters or banks, which have generally served consumers well when vigorously enforced. Certain aspects of virtual currency could dovetail with existing regulations," Lawsky added, saying that the state is still considering to create new but tougher laws to prevent money laundering.
In January, digital currency entrepreneurs had been urging Lawsky to avoid writing new rules that could restrain the fledging technology's promise for lower costs and less chances of money payments fraud in the payments system currently dominated by giants Visa Inc and JPMorgan Chase & Co, said Bloomberg.
Lawsky also stated, "(New York will) likely have to proceed with issuing some form of specially tailored BitLicense that adapts those rules to the world of virtual currency." He also said on January 27 that his agency will be submitting the regulation proposals sometime this year.
In an interview after his conference speech, Lawsky also shared the plans of New York that it will be using a system that piggybacks on existing federal money laundering laws without needing to create a new set of regulations. He stated that the focus of the regulations will be customer-based, which will demand cognizance on clients' suspicious activity by digital-currency businesses together with public transaction records.
According to the Financial Crimes Enforcement Network of the US Treasury Department in March, digital currency businesses could be regulated as money transmitters and that they should be registered in order to operate. Because of the decision to license companies dealing with Bitcoin, for one, other states who have yet to apply such rule are going over their regulation strategies on how to treat an industry which is technically still in its early stages, Blommberg said.
