BitLicence Commentary Period Comes To A Close - From The CoinFront

The commenting period for New York’s BitLicence proposal has now come to a close.

The final day for commenting was yesterday. New York’s Department of Financial Services will now take what they’ve heard from the community and use that to build a better BitLicence.

Or at least, that’s what the community is hoping.

Many big names in the industry have already put in their comments on it. Circle CEO Jeremy Allaire has called it “technically impossible to comply with“, while Xapo and OKCoin had similar complaints. Coinbase’s comments were more tempered, but still opposed it in its current state. The Bitcoin Foundation, Digital Currency Council, and the Electronic Frontier Foundation have all spoken out against it.

Final Commentary

BitPay, which was surprisingly mum on the subject, put in their commentary at the eleventh hour. In their argument, they outline what they believe to be major weaknesses in the BitLicence as it currently exists.

They believe it lacks what they call “innovative rule making”, calling the BitLicence “a compilation of every banking rules and regulations that exist rather than a risk-based ensemble of controls that enables innovation…with sound consumer protection, anti-money laundering objectives and data security controls.”

BitPay made several specific requests, including the removal of requirements for audited annual financial statements, and the requirement for names, account numbers, and physical addresses to be collected from any users for every transaction.

“Merchants on Broadway do not collect such information for ‘each transaction'”, their statement reads, “whether via cash for a hotdog or via debbit cards to attend a show.” This attitude of hyper regulation of Bitcoin will lead to an uneven playing field where the use of Bitcoin will be far more inconvenient than fiat currency.

New York’s Future

NYDFS Superintendant Benjamin Lawsky recently said in a talk at Cardozo Law School that the BitLicence in its current framework was somewhat rushed. As a result of Mt. Gox’s collapse, they felt it necessary to get to work on a Bitcoin regulatory framework as soon as possible.

This may explain why the BitLicence seems to overextend itself and falls so far short of what most in the community would prefer.

At this point, the commentary period is over, but the Bitcoin community will doubtless still have lots of commentary on it.

BitLicence Commentary Period Comes To A Close