Bitcoin Foundation to NYDFS: Public Needs Access to BitLicense Research

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Bitcoin Foundation to NYDFS: Public Needs Access to BitLicense Research
Bitcoin Foundation to NYDFS: Public Needs Access to BitLicense Research

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No doubt, there’s be no shortage of discussion surrounding the so-called BitLicense proposal put out by the New York Department of Financial Services (NYDFS). The proposal, which is currently in a commenting period, has attracted the attention of consumers and businesses alike. Many, it seems, aren’t fond of the strict regulations the NYDFS plans to put in place, citing the possibility that these regulations could stifle innovation in the cryptocurrency industry in the state of New York.

And one of the loudest voices when it comes to telling the Department of Financial Services whats on the minds of the community is the Bitcoin Foundation.

The organization today submitted comments highlighting the need for public access to the “extensive research and analysis” allegedly conducted by the NYDFS during the composition of their proposal.

From today’s news release:

The Foundation’s comment seeks to learn the rationale the NYDFS used to substantiate its technology-specific regulatory proposal, which bucks the consensus among state and federal regulators that are integrating Bitcoin as a new financial technology into existing regulatory programs.

Back in early August, the Foundation had requested “copies of any risk management and cost-benefit analysis (or other systematic assessment) that is part of the ‘extensive research and analysis’ referred to in the statement of needs and benefits for the proposed regulation” to the NYDFS.

The same day the request was made, the NYDFS had promised to deliver the requested information within a 20-day period. However, on the 9th of September, the NYDFS delayed the delivery of that information until December. That is well after the date when the public commenting period ends on the 20th of October.

“The sacrifice of some decentralization in furtherance of other benefits to the Bitcoin ecosystem must meet a high burden of proof. Nobody should want a regulation that sacrifices Bitcoin’s benefits if doing so produces unknown or merely speculative benefits for New York consumers of the New York financial services marketplace,” said Jim Harper, Global Policy Counsel for the Foundation.

He adds, “The language of the ‘BitLicense’ proposal would apply non-financial uses of Bitcoin’s public ledger, including communicative and expressive uses. This would run afoul of U.S. constitutional protections against regulation of speech.”

“A regulatory regime that is markedly out of step with others is very likely to create inefficiency in national and global markets, which would suppress competition, hamper the delivery of benefits to consumers and frustrate consumers,” he concludes. “New York is a very special state, but we recommend that it join the national and global community of regulatory bodies that are taking a methodical, iterative approach to Bitcoin business regulation.”