BTC/USD trades sideways as regulator eases Bitcoin license burden
iNVEZZ.com, Friday, December 19: The BTC/USD has seen little change so far in today’s trading following yesterday’s announcement that New York’s biggest bank regulator will introduce new legislation giving Bitcoin start-ups more time to meet the US’s first rules for licensing participants involved in the provision of the digital currency services.
Yesterday, the state’s Department of Financial Services (NYDFS) said it would offer a two-year transitional BitLicense, issued to firms that cannot immediately pass the requirements for a full license. It is aimed at start-ups and small businesses. New York is the first state to propose rules for digital currencies as regulators struggle to decide how to oversee Bitcoin.
Benjamin Lawsky, superintendent of the NYDFS, announced his new proposal for the so-called BitLicense in a speech. “Our initial proposal was meant as a beginning—not an end—to a healthy, vigorous public discussion about what the final regulation should look like,” Lawsky explained. Investors holding virtual currencies for personal investment and retailers accepting them as payment won’t need a BitLicense.
Lawsky said the final regulatory framework for digital currencies should be established in early 2015, adding that his office hopes to have several licensed firms and exchanges in New York shortly thereafter. He concluded his statement by commenting: “we at NYDFS are truly very excited about what we are seeing right now in payments technology. However, it presents a serious challenge not only for banks, but also for regulators.”
As of 14:17 GMT the BTC/USD stood at $310.92 down 0.13 percent intraday. The digital currency’s volatility, a consequence of its decentralized nature and small trading volume, has been a major obstacle to its growth. The cryptocurrency peaked above $1,000 in December last year, but has lost over 50 percent of its value so far in 2014. According to Matt Phillips of business website Quartz: “Bitcoin is the worst investment of 2014”.
The Guardian noted on Wednesday: “If you held one bitcoin at the beginning of 2014, you would have lost 52% of the value of your investment. That’s worse than buying into the Greek stock exchange (28%) or the Argentine peso (24%). Depending on where the Russian rouble is when you read this, it may even prove to be a worse investment than that free-falling currency”.