BitLicense Has Done More Good Than Bad to the Bitcoin Sector

BitLicense, introduced in the New York state did more harm than good to the digital currency technology industry. Other governments intend to avoid making the same mistakes. Read more…
When BitLicense was introduced, it was hailed as a defining moment, where the government-less and regulation-less cryptocurrency platforms meet regulatory machinery set up by governments and centralized organizations. A bit over one year down the line, BitLicense is being constantly referred back to, in order to avoid doing the same mistakes.
BitLicense, introduced by Benjamin Lawsky, then Superintendent of the New York State Department of Financial Services led to the implementation of a stringent regulatory framework for the digital currency industry. The license was seen on par with the regulatory practices mainstream financial services are subjected to. However, the requirements stated by BitLicense, in order to overcome the decentralized and pseudonymous nature of Bitcoin far exceeded the AML and KYC practices otherwise followed by traditional banks and financial institutions. These factors proved to be detrimental to the majority of Bitcoin businesses operating in the State of New York.
Bitcoin was and still is relatively new, the sector being in its nascent stage makes most of the companies working on Bitcoin and Blockchain technologies startups. The stringent requirements stated by BitLicense was impossible to adhere to unless the company had venture capital backing. In addition, the BitLicense also threatened the very principle of Bitcoin, which was developed as a decentralized currency for peer to peer transactions where governments or any third party has no business meddling with.

This post was published at NewsBTC on 5:30 pm May 29, 201.