Eric Adams – the mayor of New York City – has suggested doing away with the dreaded BitLicense as a way of allowing New York to become more competitive in the crypto and blockchain worlds.
Will New York Get Rid of the BitLicense?
The BitLicense was first introduced in 2014. The document made things very hard for crypto companies seeking to establish presences in the Big Apple. It also made it very difficult for them to gain customers. Under the BitLicense, things became rather complicated, with crypto companies having to submit mounds of paperwork and pay heavy fees just to retain offices in NYC.
Thus far, very few crypto companies have obtained BitLicenses as a means of keeping their New York operations intact. Gemini is one example, but many crypto exchanges – including Kraken and Coinbase, two of the biggest trading platforms in the world – have said “no,” and decided to pack up their bags and leave town.
Adams wants New York City to be at the forefront of crypto development and innovation. In a recent speech, he acknowledged the BitLicense has made things rough for crypto companies trying to do business in his city and he wants to change that. He stated:
New York State is the only state to require a license for crypto companies. That’s a high barrier, and it just makes us less competitive. We need to continue to be competitive.
The move is making a lot of regulators from Albany – the capital of New York – raise their eyebrows in concern and protest, as many state officials are trying to tighten crypto rules in New York. They are worried that Adams is going to undermine their authority and potentially open the door to crypto scams and fraud that would otherwise have been shut out under the strict BitLicense terms.
But Adams – sounding a bit like a republican instead of a democrat – feels that removing regulation is the right move to make when it comes to ensuring New York’s future in the growth of America’s financial sector. He stated:
It’s about thinking not only outside the box, but on this one, we may have to destroy the box.
Michael Kink – executive director of New York’s Strong Economy for All Coalition – explained that removing the BitLicense would bring the crypto space back to its “Wild West” days. He commented:
Crypto is a speculative marketplace filled with all kinds of fraud and scams because of how deregulated it is. With dangerous assets like that, it’s more important than anything to have more oversight and regulation, not less.
Some Want It to Stay
Lee Reiners – executive director of Duke University’s Global Financial Markets Center – agreed with Kink, saying the BitLicense has helped keep scam artists out of New York. He said:
Contrary to harming innovation, I think it has helped.