NYS Senate Hearing Brief: BitLicensing in the State of New York
Reporting from the belly of the very beast itself, dr.Purple here as your man on the inside. To recap the hearing in just a few words, I would say that the State of New York, as represented by Senators Carlucci and Hamilton, are willing to work with us. As most of you may or may not know, the State of New York (long running as the financial capital of the country and economic front runner for the world) has taken a draconian stance on the issuing of cryto-exchange licenses, also known as BitLicenses (FULL LEGISLATIVE DOCUMENT AVAILABLE HERE http://www.dfs.ny.gov/legal/regulations/adoptions/dfsp200t.pdf). There are currently only three, yes three, licensed exchanges in the state (Circle, Coinbase, and Ripple).
The forum was open and mutually respectful, both sides considering the others’ points, Senators Carlucci and Hamilton were open to legislative suggestions and more information on the underlying technologies at play. A well represented and diverse round-table of financial (bank) representatives, asset managers, tech developers/entrepreneurs, lawyers, and crypto-enthusiasts each had a few minutes to speak about their use of digital assets (deemed a more accurate label than cryptocurrencies).
The looming question for the panel from the Senators and general theme of the forum was, “How should the government classify digital assets?” It is the difficulty in classifying digital assets that has led the state to take its position on issuing BitLicenses. They don’t know about the technology or how to treat it, so they shut it down; overbearing and harsh, but an effective way to cover their butts. The general consensus to answer the classification question was to not try to classify digital assets at all, just yet at least. Blockchain technology is evolving faster than any government can even think about regulating properly, to slap a label on it now could be damaging to a growing industry and stifle job creation in the state. It was the persistent mention of “Jobs Jobs Jobs” from the panel that really resonated with the Senators and other state government representatives.
For the government to label digital assets at this time for the sake of legislation was a premature move on their part. Members of the round-table wisely advised to let the use of a digital asset determine its definition and ultimate classification and regulation. There are already well established governing bodies in state and federal government which are more than capable of regulating digital assets and protecting consumers, the trick is to get out of their way and let them do what they were created to do. To hinder the development of a growing digital asset industry in the state would hurt New York’s job competitiveness and erase its position as a hub for crypto-enthusiasts and professionals. Silicon valley won the internet…the winner of this new technology is yet to be determined, and there are many players.