The BitLicense was the first set of state-based rules governing specifically targeting virtual currencies. They were finalized in June under the supervision of former DFS head Benjamin Lawsky after intense lobbying efforts by Bitcoin supporters and detractors.
Circle Internet Financial was the one to make history gaining the first ever BitLicense and will now be able to offer its services in New York state.
Circle will be under the watchful eye of the New York Department of Financial Services who will monitor the company to ensure compliance with strict regulations governing money laundering, capital requirements and consumer protection. The DFS is currently reviewing applications from 24 other firms.
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A mobile payments firm that can transfer and exchange Bitcoin, the largest and most advanced virtual currency. The company has 65 employees and customers in 100 countries. The BitLicense was the first set of state-based rules governing specifically targeting virtual currencies. The DFS is reviewing applications from 24 other firms.
Anthony J. Albanese, New York’s acting superintendent of financial services, said in a statement. “Issuing the first BitLicense is an important milestone in the long-term development of the virtual currency industry. Putting in place rules of the road that help protect consumers from loss or theft and root out illicit activity is vital to building trust in this new financial technology,”
Digital currencies have been a constant source of controversy with regulators and government officials suspicious of their ability to expand options to conduct illegal transactions. However, Bitcoin and other online currencies have begun to be accepted in the wider financial community and are being embraced by mainstream institutions.
The Bitcoin industry had serious reservations about the introduction of a BitLicense, fearing that it would hamper innovation, stifle growth and make New York and unattractive place for digital currency entrepreneurs.
Circle co-founders Sean Neville and Jeremy Allaire are still cautious about the BitLicense but have come to accept the rules as the price of doing business.
“We’ve been fairly vocal about our concerns with the BitLicense, especially in its initial incarnation. Many of those issues were resolved, and though still not perfect, the BitLicense and its requirements became clear and irrefutable prerequisites for serving and supporting everyone in New York,” the co-founders wrote in a blog post.
