Last week our theme was “Anonymous transactions in Bitcoin”
Our theme for this week is “New York regulators approved new Crypto ventures“
Its official, New Yorkers can now use Robinhood to buy Bitcoin. The Department of Financial Services in New York has officially approved a BitLicense for the popular trading app. Residents in the State of New York will be able to buy Bitcoin using Robinhood’s app, with their debit cards.
In a blog post, Robinhood announced they were also granted a money transmission license by the state. Since January last year, Robinhood has expanded the number of cryptocurrencies listed and currently has seven of them available in 30 states across the US.
LibertyX was the second company to be recently granted a BitLicense, becoming the very first regulated company to let New Yorkers buy Bitcoin, using traditional ATMs. Their BitLicense will allow New Yorkers to purchase BTC, at potentially thousands of brick and mortar locations through the state. LibertyX introduced the first Bitcoin machine in 2014. The company makes it easy for anyone to buy virtual currencies in more than 19,000 physical location in the U.S.
When it come to cryptocurrencies, the State of New York has some of the toughest regulations. A BitLicense is required to offer cryptocurrency services in New York. The license was created in 2015 and is considered one of the most important and hardest licenses to get in the US, because of strict regulations relating to anti-money-laundering, anti-fraud and cybersecurity policies. Up to now, the New York regulator has approved 16 companies to offer cryptocurrency services in New York.
Many investors see regulation as the primary reason for crypto’s bear market and the ICO slowdown in 2018. Most crypto enthusiasts are not optimistic about regulations for crypto. For many, the idea of assets like Bitcoin is to get around the regulations of the traditional financial system. An article on Medium, goes as far as saying “The BitLicense Is a Bad Idea That Must Die“.
“All the “BitLicenses” in the world could not stop MTGOX from having a software problem, and no law can bring back the money lost either directly or through the disruption the event caused by the software error. Once again, entrepreneurs powered by the internet make life easier and better, not laws and regulations. Regulation does not make software correct; developers do.”
Recently, the Winklevoss twins publicly ran an advertising campaign encouraging rules for crypto. The ad goes: “Crypto Needs Rules.”
I think that regulation is very important for validating crypto. When big organizations like Yale, Goldman and Fidelity make investments in cryptocurrencies, this brings a lot of credibility to the market. But, regulation can validate the market beyond anything else. It brings clarity and protection to both businesses and consumers.
The fact that government regulators are taking note, is very important. Yet, none of this is to say that government regulations are always good. Regulations need to be taken with a grain of salt, because over-regulation can hurt businesses in an early stage of growth and stifle innovation. As we go through this transitional period, its very likely that those who can’t afford to play by the rules, will disappear.
I expect 2019, will be the year of regulation. At the last G20 meeting, the top 20 economies said it clearly: “We will regulate cryptocurrencies.”
We will see more and more government agencies across the globe, defining regulatory frameworks for crypto, to provide adequate consumer protection. More regulatory clarity can speed up the process of major financial institutions getting in the market and open up the possibility of public investment vehicles, like an exchange-traded fund (ETF), Regulation is blessing for crypto entrepreneurs and companies, because it will provide clarity and fuel further market growth.
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Ilias Louis Hatzis is the Founder & CEO at Mercato Blockchain Corporation AG. He writes the Blockchain Weekly Front Page each Monday.