The divided regulatory policies and frameworks on digital currencies, including Bitcoin, in the United States have created an impractical ecosystem for startups to operate in.
The country’s state-by-state regulations for money transmission licensing has led to an unclear regulatory framework for digital currencies, with some states, including North Carolina, New Jersey and California, establishing regulations in favor of digital currency startups and businesses, while others, such as New York and Connecticut, require startups to obtain expensive licenses to operate as legal entities.
This rules-based approach from government agencies has made it virtually impossible for digital currency startups to be compliant with each state’s regulations, resulting in the termination of services in some states.
In response to the Office of the Comptroller of the Currency’s request for comment, Coin Center, a Washington-based, non-profit cryptocurrency research center asked for the development of a federal charter that would create a unified lightweight, limited purpose regulatory framework for fintech and digital currencies in the United States.
“How can [we] facilitate responsible innovation by institutions of all sizes?” the OCC asked in its white paper.
Coin Center suggests that a simple answer and approach to this core issue of innovation is to enable fintech and virtual currency startups to obtain a passport to offer cross-state services throughout the nation, without dealing with state-independent regulations on money transmission.
The elimination of barriers between states will additionally open fintech startups to numerous payment and financial systems which they can use to obtain banking services. Reflecting on the concept of open network introduced by the OCC in its white paper, it is only logical to offer an open regulatory environment for fintech startups that are focused on bringing innovative and disruptive financial services to the country.
The OCC, an independent bureau within the Treasury Department, holds the ability to regulate and supervise all national […]
