The New York Department of Financial Services (DFS) BitLicense requirement is causing crypto firms to move out. The department claims it wants to self-regulate the way to “access the virtual currency marketplace.” However, New York City Mayor Eric Adams says this regulation will cost a loss to the state’s digital economy.
New York has always been a center of business and economic development for years. Every new thought, revolution, and change starts in one of the main cities of the United States. In fact, the World Trade Center is located in New York City.
With NY’s reputation, many might believe that the state is also empowering crypto firms to do business in the city. However, it is doing the opposite.
NY DFS introduces BitLicense
Crypto firms have been unable to do business in NY since 2015 when DFS issued a license requirement for every “virtual currency business” to operate in the city.
This license is called BitLicense, designed by Benjamin Lawsky, NY’s first Superintendent of Financial Services.
The problem arises because of the strict regulatory requirements within the license that limits the crypto firms from making big decisions or entering the market within New York. BitLicense requires crypto startups to pay about $5,000 for application fees with a certain amount of capital.
Furthermore, the Assemblymember and Governor Kathy Hochul also implemented a law that requires crypto firms to pay a yearly assessment fee. In response to this, FDS claims that this bill “will empower the Department to build a staff with the capacity and expertise to best regulate and support this rapidly growing industry.”
To reduce carbon energy emissions in the environment, the New York State Assembly passed a Senate to ban the proof-of-work (PoW) cryptocurrency mining platforms from operating. New York’s lawmakers and politicians’ refusal to recognize the importance of the digital economy has cost Many firms to move out of the city to other states.
NY Mayor rejects BitLicense
Adams sees it as an alarming sign for New York’s economic growth. If the state fails to accommodate the fastest-growing economic system in the city, it can result in a loss of talent and competition in the market.
He says, “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 have to continue to be competitive.”
Adams is one of the most prominent political figures in the crypto community whose one of his agendas as a mayor is to make New York the center of the cryptocurrency industry. He is also the first mayor to receive his pay in Bitcoin currency.
In a Q&A session with Financial Times, he added, “Crypto and blockchain are [the] next chapters in the future, crypto and blockchain are here to stay, we can’t let this opportunity pass us by.”
He also mentioned the importance of educating young kids about the blockchain industry as it is the future of the economy. He announced, “I’m going to partner with all of the leaders in this industry and start building out school curriculum so we can have young people prepared to fill jobs that will be available [in crypto].”
As a crypto advocate, he has taken the responsibility to develop New York as the hub of the digital economy.
Bill Ackman calls out Adams
Bill Ackman, a billionaire investor called out the NY mayor to solve the unclarity issues regarding crypto regulations and to prioritize solving the licensing issue. He tweeted:
Final words
New York continues to implement BitLicense despite the increasing crypto community in the city. There is no doubt in claiming that NY’s refusal to improve and ease requirements will eventually draw out crypto investors and startups from the city.
If the New York Mayor wants to achieve his goal of making the city the hub of cryptocurrency, he should start by making an effort to remove or ease the licensing conditions.
