Regulations and the rulebook instituted by traditional organizations have always acted as obstacles for the nascent cryptocurrency industry which brings with it new functionalities and features. After years of debating over which set of regulations is best for the world of virtual assets, US state governments finally seem to have arrived at a middle ground.
On September 15, the Conference of State Bank Supervisors [CSBS] revealed a new regulatory regime for money service businesses that is set to enable a more seamless cryptocurrency industry. The latest proposal will include a single exam that will be conducted by state regulators which will determine the handing out of trading licenses.
The latest unveil is set to benefit not just the smaller cryptocurrency companies but also financial mainstays like Western Union and PayPal. According to the CSBS, the leaner regulation scheme will make it easier for institutions to operate across multiple states. It has become important for the state governments to favor the aforementioned organizations because of the sheer amount fo economic traffic that they bring-just last year, the 78 large payment firms that come under the new regulations moved almost $1 trillion in terms of transactions.
The latest set of rules comes after years of complaints and recommendations from crypto companies and their supporters. Under the new regime, rules will be proposed by a selected set of regulators from a few states who will act as the overwatch for the entire country. This sentiment was also reiterated by CSBS president and chief executive John Ryan who fully backed the new idea. According to him, states will be able to share information from the initial exams with each state reserving the right to launch their own investigations if they seek to do so.
Mr. Ryan further added that the states weren’t giving up authority but were rather realizing the “efficiencies of sharing information”. Kevin Hagler, a member of the CSBS board added:
“One company, one exam is a significant and important shift in how state regulators will ensure compliance with consumer protection and safety and soundness standards for the largest payments companies. By working together and relying on the excellent work of fellow state regulators, we will be able to do even more.”
The decision has certainly been met with a lot of appreciation from the world of fintech, which has been burdened with red tape ever since its inception. If all things go according to plan, then it may only be a matter of weeks before cryptocurrency organizations can function at full tilt in the US legally.