Calling the BitLicense over-regulation, Xapo,Bitcoin wallet provider that recently launched its debit card, says that it will have to block the New York customers if the New York Department of Financial Services (NYDFS) regulations against Bitcoin will be on. It is to be noted that NYDFS unveiled some measures consisting strict regulations on Bitcoin a couple of months ago.
In a blog at the official website, Xapo says that over-regulation as with the proposed BitLicense is not going to gel well with the digital currency as according to it this is going to hinder progress and serve an anticompetitive function where only the well-capitalized survive. The company has been opposing the move since the beginning.
The blog, written by Wences Cesares, Xapo founder and CEO, says that even in a nascent industry such as Bitcoin, competition and innovation have already driven out shady operators while ushering in new and disruptive alternatives (from hosted cold storage vaults to the encryption protocols that allow consumers to store their coins on their own devices).
According to the blogger at Xapo regulating competitors out of the industry is not a good outcome for Bitcoin as at this stage a rising tide lifts all ships. Also, as the proposed BitLicense will have a potentially counterintuitive effect since the leaders in Bitcoin it would be extremely counterproductive.
Though Xapo is For Smart Regulations, The BitLicense is Harsh One
The company believes that with the BitLicense those with professional management teams dedicated to security and compliance will not be able to operate in New York. Also, though New Yorkers will continue to use Bitcoin, they will be forced to use providers that operate outside the current legitimized and professionalized cohort.
Thus, according to the blog the provision of services simply will not be up to the standards that we aim to provide, and New York consumers will suffer the consequences. In consequence to the legal complexities Xapo has decided to completely avoid New York customers if the state passes its proposed BitLicense plan.
Wences Cesares accuses the state government’s proposal of overreaching and says that though he doesn’t necessarily oppose smart regulation for the peer-to-peer decentralized digital currency industry, he believes the proposal as written not only threatens the Bitcoin economy and innovation but consumers as well.
He writes that New York’s proposed BitLicense in its current form is the wrong form of regulation and in fact poses a threat to New York and New York consumers and he believes that at this early stage in Bitcoin’s history, investing the time needed to arrive at the right regulation is time well spent.
To contact the reporter of this story: Deepak Tiwari at email@example.com