New York issues first bitcoin license, brings consumer protection

Regulators hope the licenses will help build consumer trust in virtual currencies

New York State's financial regulator has issued its first bitcoin license, bringing consumer protection, compliance and cybersecurity guidelines to what still is very much the Wild West of the financial industry.

The BitLicense imposes some of the same conditions on companies operating with virtual currencies such as bitcoin as it does with institutions handling conventional currencies.

The license was issued to Circle Internet Financial, a startup that's received millions of dollars in funding from venture capital firms including Goldman Sachs and IDG Capital Partners. The latter company is a subsidiary of International Data Group, the parent of IDG News Service.

The license will allow Circle to offer a version of its mobile payments system in bitcoin in addition to U.S. dollars.

"Issuing the first BitLicense is an important milestone in the long-term development of the virtual currency industry," Anthony Albanese, New York State's acting superintendent of Financial Services, said in a statement.

Earlier this year, the state issued its first license to a bitcoin exchange, but it wasn't the BitLicense. ItBit chose to register as a trust company -- something that brings a stricter set of rules and regulations, The New York Times reported at the time.

Bitcoin's shine has been somewhat tarnished in the two years since the value of the cryptocurrency hit fantastic highs and people piled into bitcoin "investments." Today, the currency is worth substantially less but while the hype has gone, real interest remains in bitcoin or the idea of virtual money.

At the TechCrunch Disrupt conference in San Francisco on Monday, bitcoin enthusiasts said they believe the currency will ultimately succeed because the underlying technology remains strong.

For that to happen, consumers will need to be able to trust bitcoin holdings -- something that New York's BitLicense is meant to encourage.

"Putting in place rules of the road that help protect consumers from loss or theft and root out illicit activity is vital to building trust in this new financial technology," said Albanese.

Join the newsletter!

Or

Sign up to gain exclusive access to email subscriptions, event invitations, competitions, giveaways, and much more.

Membership is free, and your security and privacy remain protected. View our privacy policy before signing up.

Error: Please check your email address.
Keep up with the latest tech news, reviews and previews by subscribing to the Good Gear Guide newsletter.

Martyn Williams

IDG News Service
Show Comments

Cool Tech

Toys for Boys

Family Friendly

Stocking Stuffer

SmartLens - Clip on Phone Camera Lens Set of 3

Learn more >

Christmas Gift Guide

Click for more ›

Brand Post

Most Popular Reviews

Latest Articles

Resources

PCW Evaluation Team

Aysha Strobbe

Microsoft Office 365/HP Spectre x360

Microsoft Office continues to make a student’s life that little bit easier by offering reliable, easy to use, time-saving functionality, while continuing to develop new features that further enhance what is already a formidable collection of applications

Michael Hargreaves

Microsoft Office 365/Dell XPS 15 2-in-1

I’d recommend a Dell XPS 15 2-in-1 and the new Windows 10 to anyone who needs to get serious work done (before you kick back on your couch with your favourite Netflix show.)

Maryellen Rose George

Brother PT-P750W

It’s useful for office tasks as well as pragmatic labelling of equipment and storage – just don’t get too excited and label everything in sight!

Cathy Giles

Brother MFC-L8900CDW

The Brother MFC-L8900CDW is an absolute stand out. I struggle to fault it.

Luke Hill

MSI GT75 TITAN

I need power and lots of it. As a Front End Web developer anything less just won’t cut it which is why the MSI GT75 is an outstanding laptop for me. It’s a sleek and futuristic looking, high quality, beast that has a touch of sci-fi flare about it.

Emily Tyson

MSI GE63 Raider

If you’re looking to invest in your next work horse laptop for work or home use, you can’t go wrong with the MSI GE63.

Featured Content

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?