Industry Experts: BitLicense Isn’t the Regulatory Template for the UK
Summary
In June 2015, the New York Department of Financial Services (NYDFS) released its application for a ‘License to Engage in Virtual Currency Business Activity’, also known as a BitLicense. Unsurprisingly, it received many critics who claimed that it put too much of a burden on fledging startups with many stating that they would not be serving people in New York. After all, the whole point of using digital currencies such as bitcoin is to conduct transactions anonymously on a public ledger by a peer-to-peer network, thus ensuring an individual’s privacy while maintaining transparency. Of course, that didn’t stop Coinbase, one of the leading bitcoin businesses, from submitting for a BitLicense in New York State, to gain regulatory approval in August of the same year. Brian Forde, director of the MIT Digital Currency Initiative, said in a blog that New York risked becoming the ‘bitcoin backwater of the U.S.’ While Jesse Powell, co-founder and CEO of Kraken, stated: “Many fear it will stifle innovation in the industry and exclude New York from the developing currency.” And yet, while regulation of digital currencies such as bitcoin may eventually increase confidence in consumers and businesses, it doesn’t provide the answer for the U.K.