New York Regulators Propose Rules for Digital Currency

Companies that trade and store virtual currencies such as Bitcoin may be regulated in the state of New York.

The New York Department of Financial Services has proposed requiring a license called a BitLicense, the Associated Press reported.

The license would cover those who buy and sell virtual currency as a business. Businesses who allow use of Bitcoin to buy and sell goods and services, such as Overstock.com, would not need a license.

Bitcoin is one of the most popular digital currencies. Users trade cash for virtual currency using online exchanges, then store it in a “wallet” on their computer or smart phone. The program can transfer payments directly to a merchant who accepts the currency or to private parties. No bank or credit card information is needed and there are no transaction fees.

Financial Services Superintendent Ben Lawsky tells the AP that his agency is trying to reduce money laundering and protect consumers without stifling innovation. The Bitcoin Foundation, a nonprofit organization that promotes the currency, questioned whether separate regulations were warranted. “The preference would be for there not to be a special Bitcoin license but simply to integrate Bitcoin into financial services,” he said.

The proposed rules are available for public comment.