New York State’s financial regulator has proposed a set of frameworks that would allow cryptocurrency exchanges to list new coins and tokens without regulatory approval, according to Reuters.
The New York State Department of Financial Services (NYDFS) has requested public comments on the proposal, with the deadline being set for January 27 2020.
The regulator has seen New York become one of the most forward-thinking states when it comes to cryptocurrency regulation, launching its initial frameworks and BitLicense in 2015.
However, the wave of regulatory scrutiny four years ago caused the “Great Bitcoin Exodus” in the following year, with at least 10 cryptocurrency companies deciding to stop operating in New York.
Licenses were originally granted to Boston-based Circle, Paxos Trust Company, and the Winklevoss’ crypto exchange Gemini.
Since then, licenses have also been granted to more than 20 companies including Robinhood Crypto, Bitstamp USA, and Tokyo-based BitFlyer.
— Reuters (@Reuters) December 11, 2019
The combined market cap of cryptocurrencies has risen from $4 billion to $200 billion since the original frameworks were implemented, with mainstream adoption and institutional investment seeing a significant boost over the past 24 months.
As a result, the market dynamics have shifted significantly, which has prompted the NYDFS to reevaluate its approach.
The plan is to allow licensed firms “to offer and use new coins in a timely fashion”, which would mean that exchanges like Gemini could list new coins without seeking approval.
The regulator’s decision demonstrates how the traditional finance industry is beginning to warm towards digital assets.
This was also highlighted by the launch of Bitcoin futures on Bakkt, which is a subsidiary of the Intercontinental Exchange (ICE).
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