Center for Financial Stability Advocates for Regulatory Framework for Bitcoin

In an article titled "Bitcoin Needs Smart and Safe Regulation," Lawrence Goodman, President of the Center for Financial Stability, advocates for regulators to create a "forward-looking and largely hands-off" regulatory environment for bitcoin.

Mr. Goodman stated that while bitcoin offers great promise, it also carries "tremendous" risk if it is allowed to "expand without the proper protections" for consumers and investors. He commended the New York's Department of Financial Services efforts to fill the regulatory void through its BitLicense proposal, but he also seemed to indicate that the establishment of a uniform federal system of federal regulation might be a better path than rules from numerous state regulators.

Although Mr. Goodman cautioned against "bureaucratic overreach," he also stated that bitcoin exchanges would benefit from "adequate capital backstops, regulatory examinations and stress tests, protective processes against cyber breaches, and anti-money laundering procedures."

Related news: NY Department of Financial Services Revises BitLicense Proposal (with Lofchie Comment) (February 5, 2015); Mercatus Center Technology Policy Program Submits Comments to New York DFS on Proposed Virtual Currency Framework (August 14, 2014); NY DFS Releases Proposed Licensing and Regulatory Framework for Virtual Currency Firms (with Brito Comment) (July 18, 2014).