On Thursday the New York Department of Financial Services issued the first draft of what they call a “bitlicense”. People have been restless to find out how the New York State government plans to regulate cryptocurrency, and what was unveiled is possibly a worst-case-scenario come true for bitcoiners. Most people in the Bitcoin community see the proposed regulations as being completely outdated. The “bitlicense” treats cryptocurrency like paper money, hauling it back into an old-fashioned financial system, when it is in fact a revolutionary technology that should be recognized as unique. This license will not help secure people from fraud, it will only place so much obstruction in front of the innovators trying to develop this technology that it will simply drive these people out of New York State. Many have already remarked that the bitlicense is unworkable for startups already devoting all of their resources to inventing entirely new businesses.
If digital currency is the future, which makes sense in a digital age, then the current financial capital of the world won’t hold that title for much longer. The New York Department of Financial Services is currently taking feedback from the community about the proposed regulations, and this is certainly a step in the right direction. Now is the time for the Bitcoin community to mobilize and really educate people. New York will provide a precedent for other states regarding regulation, so let’s hope that the people who understand this technology the best can lead the regulators in the right direction. This is our chance to get it right, and education is the key.