The New York State Department of Financial Services (NYDFS) has just announced it will be establishing the Research and Innovation Division, which will be focused on “virtual currency business activity.”

New York regulators will soon be following digital assets and cryptocurrencies more closely. The NYDFS is setting up an entirely new division within its jurisdiction that will focus on so-called “virtual currencies” with special attention on ‘BitLicenses,’ a special license designed for entities engaging in this sector. The division will also be responsible for “promoting market innovation.”

It seems clear that New York wishes to expand on the existing legal situation in the state. The division thus could potentially position the state as the leading legal jurisdiction for cryptocurrencies within the United States.

For those of us in the blockchain sector, the establishment of this new sector should indicate some level of progress. New York has commonly suffered from persistent complaints about how it handles its BitLicense regime, but the NYDFS’s new Research and Innovation Division should change that. By having an agency dedicated to such matters, the BitLicense should be met with less criticism—at least, we hope.

Advertisement
Continue reading below

Yet, there are those that say that New York’s BitLicense needs to be completely rethought—and, moreover, that no division can resolve the inherent issues with the virtual currency license as it exists now. Although we cannot expect any concrete changes to BitLicense as of now, it is possible that the New York State Digital Currency and Blockchain Task Force could provide some additional changes soon. The task force was established earlier this year.

Overall, the establishment of the Research and Innovation Division within the NYDFS is positive for the blockchain space in New York. It remains to be seen what kind of impact the sector will have, but there is room for optimism. Speaking of New York, the judge of the state’s Supreme Court, Joel M. Cohen, recently postponed their ruling on a case regarding Bitfinex.

Do you agree there are currently issues with the way BitLicense is handled in New York? Let us know your thoughts in the comments down below.