September 11, 2020
New York Department of Financial Services superintendent, Linda Lacewell, considers cryptocurrency a critical improvement that needs sustenance from regulators. In the latest virtual summit on The Evolution of Banking by Cato Institute, top policymakers and experts discuss how regulators can best stand-in innovations that may benefit patrons through policy.
Mainly, Linda Lacewell talked about the importance of regulators to stand back, therefore allows the entrepreneurs to lead innovations, especially in the crypto industry.
“So, I think that cryptocurrency is very important as an innovation and as a potential alternative to some aspects of the financial system. The reason I like it is that it’s organic, it’s been developed and over time, it has become more sophisticated… When you have the Fidelity’s of the world coming in, looking for some type of a BitLicense from us, you know that things have really changed. We can’t say it’s on the fringe anymore.”
Since 2018, Lacewell has been making several changes to expedite the licensing process for startups looking to break into the crypto space in New York. For this to work, the agency has created a conditional license exactly designed to remove the enormous licensing costs for startups. As an alternative to applying for a full BitLicense, conditional approval allows startups to team up with existing licensees to be legally operational in New York.
“My own view is we want to generate the conditions for innovation. But I don’t have the ideas for innovation, I know what our priorities are. But the people who have the ideas are the entrepreneurs…. We want to see to it that the innovation develops.”
Additionally, Lacewell has been pushing to allow licensed companies to self-certify computer-generated currencies. As a substitute for the innovation, NYFDS has teamed up with the State University of New York; this will enable anyone to cooperate with modernizers and entrepreneurs on projects and concepts.
“Since the industry has grown and matured, you shouldn’t have to come to us every time you have to list a coin… you shouldn’t have to come to us every time you need a license.”
To provide a legitimate alternative to the financial system, Lacewell believed that cryptocurrency shows what smart, inventive people can do.
“We have to foster industry and innovation, it’s critical now to build back better, and it’s critical also to make sure there is consumer protection. We need to continue to work together, states and federal regulators, especially now.”
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