London is viewed as the world’s capital of financial industry, and many Bitcoin enthusiasts assumed that this would make London the “major hub” for Bitcoin technology as well. However, things in the financial word have an odd way of playing out sometimes, and New York managed to claim a “world’s first” in the Bitcoin race. Not London, but New York launches the first fully regulated national Bitcoin exchange.
New York & Bitcoin Regulation – A Difficult Combination
As far as Bitcoin regulation goes in the United States, the opinions are divided to say the least. Several states let Bitcoin companies operate with a specific license, whereas others – such as New York – are working hard to create a regulatory framework for digital currency. Benjamin M. Lawsky’s BitLicense proposal should be finished by the end of this month, which could have a drastic impact on Bitcoin business in the state of New York.
One of the things worrying most Bitcoin enthusiasts in the US is that, should the BitLicense draft be approved, companies will be obligated to keep records of customer data. And those records would have to be turned over to the New York State’s Department of Financial Services if they ever decide to ask for it.
It goes without saying that many people feel uncomfortable with such a strict and drastic set of guidelines. Luckily for us, Bitcoin industry leaders, business owners and evangelists have been pleading Bitcoin’s case on our behalf. When the final version is to be released at the end of this month, we will see what the verdict will be.
On a more positive note, none of that regulatory trouble has prevented the state of New York from launching the first fully regulated national Bitcoin exchange in the US. A shocking turn of events no one expected at this point, yet it is a good to see New York is not just focusing on regulation, but also boosting their local economy.
itBit – Government Approved Digital Currency Exchange
The name ItBit is familiar in the Bitcoin space, as this company has been around for a while now. Obtaining approval from the government is not easy to come by, as the Bitcoin exchange will have to adhere to certain rules. In fact, ItBit has to meet the same regulatory requirements as US banks, which will give Bitcoin in general a more professional appeal in the eyes of investors.
On the other hand, you have to keep in mind that obtaining all the necessary licensing and paperwork does not come cheap. According to the information we have received, fees could go into the millions of US dollars. However, ItBit’s mission was always to create an institutional-grade exchange, and regulatory compliance is an important aspect of achieving that goal.
Some people see this as a major blow to London’s “heart of FinTech” status, yet UK experts are not worried. “It’s still too early to know which approach will be most successful, but heavy regulation is likely to stifle innovation and the environment in London should make it more attractive to startups that don’t have millions of dollars to spend on compliance.”, Tom Robinson, head of UK Digital Currency Alliance told DigitalMoneyTimes.
Source: Business Insider UK
Images courtesy of ItBit, Shutterstock