Why New York remains sceptical about Cryptocurrency

The city that never sleeps, as well as the home of Wall Street, is yet to welcome the idea of fully adopting cryptocurrency within its state.

However, it has shown some positive signs that it may do so in the future. It has been announced that New York is establishing a ‘Cryptocurrency research team’ in order to analyse the potential impact of cryptocurrency on the states finances. By doing this, the team aims to provide data for legislators which could either make or break the possibility of the full adoption of cryptocurrency within New York. Undoubtedly, there is significant potential for this to have a positive affect on other states, as they too could conduct similar research. However, the team have until the end of 2019 to report their findings, so it remains extremely unlikely that we will know New York’s stance on cryptocurrency in the near future.

Why has New York rejected cryptocurrency before?

There have been numerous events which have shown that New York may not want cryptocurrency. Most recently, there have been multiple rulings within New York against cryptocurrency exchanges. As of January 2018, the state had only accepted just six firms for virtual currency charters or licences. Head back a few years and we can look at the case of Bitcoin Center which started in 2013 but was essentially forced to relocate from New York’s financial district in 2015, despite having obtained a legitimate licence.

 

 

 

 

 

 

 

Bitcoin Center, New York

Are firms choosing to ignore New York as a location?

Potentially, yes. Whilst some firms do get the licence to operate within New York, others chose to do so elsewhere due to other complications. For example, New York has raised incredible fees of up to nearly $5,000 for applications that may or may not be accepted. Additionally, the process has become extremely lengthy.

However, New York may not be able to do this for long. Recently, it was announced that New York’s Attorney General is taking a closer look by requesting 13 exchanges to provide with data surrounding their operations in order to assess the limits and potential of obtaining a licence in New York. There are many major cryptocurrency exchanges on the rise currently such as Binance and Bitfinex with huge profit margins. Therefore, it is unlikely that one of the financial hubs of the world will chose to ignore what is going on, and what undoubtedly has the ability to shape the future of finance.

Nonetheless, New York remains very much on the fence with Cryptocurrency and it certainly wants to make sure it makes the right move.

 

Gvidas Beniulis

International Political Economy student & Cryptocurrency enthusiast.

Founder of OurEconomy.

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