New Jersey State proposes mandatory business license for Crypto businesses
A new bill has been presented in the New Jersey State Legislature which has proposed the implementation of compulsory business licenses for any firm operating in the crypto industry.
Assembly member Yvonne Lopez has proposed a ‘Digital Asset and Blockchain Technology Act ‘on 20 February 2020 initially. It is said to be a crypto user-friendly bill and is supposedly designed to protect customers’ rights.
If the bill gets passed, it would be compulsory for every crypto-related firm to possess a mandatory license from the regulator. The bill is an effort to bring more clarity and transparency to the crypto industry.
As most of the States in the US are adopting the crypto regulations, New Jersey doesn't want to lag behind. Previously, as there were no state regulations in New Jersey, unregistered crypto operators were prosecuted under federal authority through the Department of Justice (DOJ). Lopez had tried to highlight this issue on the local level.
Pre-requisites for applying for the License
While applying for the license, the firms will have to furnish their legally registered title, any aliases and all the information required for the legal and licensing details.
They will have to furnish the schedule for the payments if any. They will also have to ensure compliance regarding anti-money laundering (AML) and Anti-terror financing policies.
They need to specify any market risks involved with their business as well. They will have to submit their licensing and legal history to the New Jersey’s Department of Banking and Insurance.
The bill includes one more condition for the crypto firms. They need to mention terms and conditions for consumer accounts and assurance to protect by the Federal Deposit Insurance Co-operation (FDIC), as their traditional account holders.
Yvonne Lopez expressed that as there is still very less mass awareness regarding the crypto assets, the states must step forward to make the citizens aware of their rights and measure to protect their rights but simultaneously the regulatory policies should not hinder the crypto sector. She assured that the bill is not against the cryptocurrencies but it will bring more transparency and mass adoption while protecting the rights of the crypto users.
Crypto Regulations to Boost the Crypto- Industry
Yvonne Lopez mentioned that the crypto industry in New Jersey is growing rapidly but at the same time, it lacks mass awareness and very few people understand its nuances. There is a growing number of states that are adopting crypto-policies. But most of the bills that were introduced included harsh regulations and thus they are not so user-friendly and lack support from the masses.
For many years, regulatory bodies have ignored the crypto sector but as the scams in this industry shadowed over the years, regulators have been vigilant over the crypto industry. Lopez confidently stated that while most of the regulators came up with harsh regulatory policies, the New Jersey Bill is said to be more user-friendly and surely will attract larger mass adoption of crypto assets reducing the risks.
CBW - External Analyst