Looks like the road to mainstream Bitcoin acceptance is paved with regulation.
The New York Department of Financial Services has issued subpoenas to a variety of New York-based Bitcoin enterprises, including Coinbase, Coinsetter and BitInstant, in an effort to collect more information about the booming virtual currency. This could lead to increased state regulation, as the department works to determine if Bitcoin companies should be regulated like other money-transmission companies, and/or be held to a separate set of standards.
In a memo published by the New York Department of Financial Services, department head Benjamin Lawsky states that they have launched an inquiry into Bitcoin with the hopes of developing regulations that can stymy the currency’s black market use and safeguard consumers. In addition to making sure Bitcoin companies comply with already existing financial services rules, the department is considering drawing up rules that apply specifically to the virtual currency market.
According to the memo:
“DFS is also considering whether it should issue new regulatory guidelines specific to virtual currencies – rather than simply apply existing money transmission regulations. As such, we could also move forward with new guidelines that are tailored to the unique characteristics of virtual currencies. We believe that – for a number of reasons – putting in place appropriate regulatory safeguards for virtual currencies will be beneficial to the long-term strength of the virtual currency industry.”
For now, the department will collect information about Bitcoin and how New York’s companies are using it to help spearhead their investigation.
Most Bitcoin enterprises Betabeat has spoken to in the past emphasized that they are not opposed to regulation, and instead are open to working with regulators to help de-stigmatize the virtual currency.
“[It’s] an opportunity for companies in our space to open up a much needed dialogue with regulators,” Coinsetter CEO Jaron Lukasiewicz told the Journal. “Most companies are working to legitimize Bitcoin and want to build bridges that help regulators understand and support these financial innovations.”