New York State has been influential in crypto regulation, having established the first comprehensive regulatory framework in the US for cryptocurrencies a decade ago. This included guidelines on consumer protection, anti-money laundering compliance, and cybersecurity. At a recent conference, Ken Coghill from the New York Department of Financial Services emphasized the importance of setting regulatory guardrails for firms that manage others' assets, which often are new crypto-native entities unfamiliar with such oversight. He noted that while only 22 BitLicenses have been issued, the NYDFS is prepared for an influx of applications from traditional financial institutions interested in cryptocurrencies. Coghill believes good regulation balances risk management without stifling innovation, continually assessing decentralized protocols and their purposes. He expressed that regulators are tasked with identifying potential negative impacts on efficiency and inclusion rather than endorsing all innovations. This discussion comes amid expectations for federal legislation concerning crypto and stablecoins in the near future.

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