Granting provisional licences could help small virtual currency firms to avoid the full burden of new regulations in New York.
Benjamin Lawsky, New York’s superintendent of financial services, has been developing a BitLicence this year to ensure firms dealing in bitcoins and other digital currencies protect consumers and help thwart money laundering. Since the rules were proposed in July, many comment letters have focused on the expense for fledging companies, Bloomberg reported.
“There has to be a way for startups to start up and play by the rules without getting crushed by huge compliance costs,” Lawsky said at the Money20/20 conference in Las Vegas. “To that point, we are considering creating a special type of ‘Transitional BitLicense.’”
Lawsky said when proposing the regulatory regime in July that he wants to protect people and root out wrongdoing without stifling innovation.
The transitional licence would let certain small businesses and startups operate in a more flexible framework for a set period of time, when they would be subject to tailored examinations, Lawsky said. In weighing applications, his office may consider aspects including the scope of the business, the amount of money handled and risk to consumers, he said.
“We have faced similar issues among the smaller, community banks we regulate,” Lawsky said. “We recognize that if a financial firm has 12 employees — and nine of them are compliance officers — that is not a winning business model.
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