Blockchain and digital currency businesses have spoken—and the New York State Department of Financial Services (NYDFS) has listened. Many have complained about how difficult it is to operate a virtual currency money transmitting service in New York, so the NYDFS is making it easier to obtain a BitLicense.
The NYDFS is now granting conditional BitLicenses, partnership opportunities, and has updated their policies that currently apply to companies that already own a BitLicense.
Conditional licenses
Among the changes the NYDFS has made in an attempt to make it easier to obtain a BitLicense, the NYDFS is now offering conditional licenses.
“When we looked at our virtual currency license, there is a provision right in there, which we have never used … that allows me as the Superintendent to grant an application for a conditional license,” said NYDFS Superintendent Linda Lacewell. “That license lasts by its terms for two years unless we convert it to a permanent license or unless for some reason it’s not working out.”
To obtain a Conditional BitLicense, a company can partner with a business that already has a BitLicense. Currently, 18 businesses have been granted a BitLicense. In addition, the NYDFS has signed a Memorandum of Understanding with The State University of New York’s (SUNY) 64 campuses.
The SUNY partnership allows individuals and businesses to partner with a SUNY and test out their digital asset and blockchain use cases under the school’s supervision. If the use case is valuable, the individual or company has the opportunity to receive a conditional BitLicense that can evolve into a permanent BitLicense for the company.
“Much of the activity tends to be centered in New York City when it comes to New York and cryptocurrency businesses and initiatives, why not open that up to the whole state?” Said Lacewell.
Most companies looking to obtain a BitLicense focus on operating out of New York City; however, Lacewell would like to make the entire state of New York an innovation hub for blockchain technology. Lacewell see’s the SUNY partnership as a way to make this happen since roughly 90% of New York residents live within 30 miles of at least one SUNY campus.
The NYDFS is also looking to make it easier for digital currency exchanges with a BitLicense to list new tokens. As long as the NYDFS has already approved a coin or token on at least three other platforms, a license holder can self-certify a coin or token and decide whether or not they would like to list that digital asset themselves.
Will more companies go to New York?
The recent changes in the NYDFS’ regulatory frameworks were made to get more blockchain and digital currency startups to set up shop in New York. Many businesses refused to create a New York office given how strict New York’s regulatory framework for blockchain and digital currency services is known to be. However, the NYDFS’s recent changes may just be enough to make New York an appealing hub for blockchain and digital currency innovation.
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