Why is BitLicense all wrong?

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BitLicenseRegulatory warnings and Federal policing of Bitcoin adoption have always triggered strong to criticism by its users. In keeping with this trend, BitLicense proposal by New York Department of Financial Services (NY DFS) is being strongly opposed for its digressive approach.

What is BitLicense?

NY DFS superintendent Benjamin Lawsky and his team have been hard at work to introduce an ecosystem that binds the use of bitcoins in guidelines, compliance and enforcement!

Digressive Control

BitLicense choking guidelines include overprescribed technical specification, inconsistent compliance regulations, and no ‘safe harbor’ assurances, besides curtailing the ecosystem for bitcoin use to develop.

Given the line-up of issues which BitLicense extolls, including the need to ‘control’ or regulate as in KYC and Anti-Money Laundering (AML) systems, it is definitely headed in the direction of stemming the growth of this alternative currency system, rather than providing the ecosystem or ‘infrastructure and support’ for it to become an alternative mode of payment in  mainstream economics.

Circle’s Neville: ‘worse, not better’

If bitcoin is to be adopted as the next standard for transactional currency, BitLicense, would make it “worse, not better,” explains Sean Neville, CTO and founder, Circle Financial.

Co-founder and CEO of Circle Financials, Jeremy Allaire, was also an interlocutor with NY DFS superintendent Benjamin Lawsky’s team, and participant at the hearings’ to develop the plans earlier in February.  Allaire is also part of the Bank Secrecy Act Advisory Group set up by the US Treasury Department.

Both have been critical of the nature of ‘BitLicense’ and its impact.

As one of Circle Financials post reads, “If BitLicense were to become the standard in the country for bitcoin use, then, it would be devastating for the industry.”

Bitter truth of ‘BitLicense’

For Bitcoin users, ‘BitLicense’ is another glaring symbol of the increasing regulation of digital currency by authorities and tightening regulatory guidelines.

To contact the reporter of this story: Deepak Tiwari at deepak@forexminute.com