The New York State Department of Financial Services (NYDFS) has announced the creation of a new licensing division for cryptographic companies.
Supervision and licensing virtual currencies, as well as dealing with financial integration through technology will fall on the shoulders of the "Research and Innovation
" division. It also specializes in the protection of consumers' data rights and encouragement of innovation in the financial services market.
Only a small number of cryptocurrency companies have gained a license via BitLicense, a division created four years ago for licensing such companies.
Many felt that the conditions of BitLicense
were too harsh, which could cause traders to withdraw from trading in the state. The licensing requirements were considered to be too burdensome for innovation and became an example to which other - also harmful - regulations are compared.
By creating this new division, NYDFS
answered the need for a special team that will handle such requests.
The law must change
Announcing the creation of a new branch, Superintendent Linda Lacewell
stressed that cryptographic regulations should evolve and adapt as innovation grows.
This new department makes it possible to bring DFS as a future regulatory authority. This will enable the Department to improve consumers' protection, develop best practices, and analyze market data to strengthen New York's position as a centre of financial innovation.
Let's hope that another advantage of having a dedicated department to supervise cryptocurrencies will be able to speed up the BitLicense application process.
The impact of BitLicense on Bakkt
began tests of acceptance among users of Bitcoin Futures products on Monday. Although everything was already planned, there were delays due to waiting for regulatory approval.
Despite obtaining the CFTC's default approval (no disapproval), it is still waiting for the consent of one regulatory authority. Bakkt
needs to become a qualified depositary to fully run its futures products, and this lies in the hands of NYDFS
certainly hopes that this new division will help speed up the process because it has been in use for several months. Interestingly, NYDFS
to a trust services company in November last year.