The state Department of Financial Services announced Tuesday morning that it has given out the nation’s first BitLicense, which is the first-of-its-kind state regulatory framework for firms dealing in virtual currencies, such as Bitcoin.
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The license went to Circle Internet Financial, a Boston-based bitcoin startup, the New York Department of Financial Services said.
Alongside other functionality, the new service will allow US customers to hold, send and request dollars from their contacts and refuel their account by bank transfer or credit card. The service does not make users convert into and out of Bitcoin, as that is handled by the platform automatically, said the newspaper.
The guidelines, issued in June, are aimed at protecting consumers, preventing money laundering and boosting cyber-security.
In May, New York regulators granted their first charter under the state’s banking law for a commercial exchange for virtual currency to itBit Trust Company LLC in New York City. Mitchell described Circle Internet Financial as a consumer payments company.
“We’re pushing bitcoin into the background for the sake of bringing bitcoin to more people”, CTO Sean Neville told The Wall Street Journal. New York regulators are still evaluating another two dozen companies that have applied for the license. The company won’t disclose exact transaction and volume data, but they are seeing “significant consumer demand” globally for its product, which now enables transactions in USA dollars and in bitcoin, she said. “Many of those issues were resolved, and though still not flawless, the BitLicense and its requirements became clear and irrefutable prerequisites for serving and supporting everyone in New York”.
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“High-quality bitcoin businesses will continue to move into the mainstream financial sector, and in some cases will be game changers”, Fenton said. Under those rules, existing virtual currency firms had until August 10, 2015 to apply for a Bitlicense.
