Circle gets first bitcoin license from New York regulators

Circle founder and CEO Jeremy Allaire.
Circle founder and CEO Jeremy Allaire.

Bitcoin’s march toward mainstream acceptance is taking another step forward.

Circle Internet Financial, a Boston company that wants to use the emerging digital currency to make global money transfers cheap and easy, is the first business to get a “BitLicense” from the State of New York.

The New York Department of Financial Services approved its final BitLicense rules in June. The regulations, which are required for digital currency companies that want to operate in New York, include a long list of consumer protections, digital security provisions, and rules for the minimum amount of money bitcoin companies need to have on hand.

The BitLicense rules also include an antimoney-laundering program that requires licensed companies to keep detailed records of their account holders’ transactions, including their identities and physical addresses.

Circle, which raised $50 million in venture capital this April, reluctantly welcomed the license. In a blog post, co-founders Jeremy Allaire and Sean Neville said the BitLicense requirements had improved since the first version proposed by New York regulators.

“Though still not perfect, the BitLicense and its requirements became clear and irrefutable prerequisites for serving and supporting everyone in New York,” they wrote. “We want to help people everywhere around the globe, and that includes New Yorkers.”

Circle also said it had released an updated version of its service, including the ability to send and receive money in US dollars without ever owning bitcoin.

New York’s acting superintendent of financial services, Anthony J. Albanese, said in a release that the BitLicense was “an important milestone in the long-term development of the virtual currency industry.” New York regulators are still evaluating another two dozen companies that have applied for the license.

“Putting in place rules of the road that help protect consumers from loss or theft and root out illicit activity is vital to building trust in this new financial technology,” Albanese said.

Bruce Fenton, executive director of the nonprofit Bitcoin Foundation, said it was good news that Circle was able to comply with the rules, which he called “burdensome.”

“High-quality bitcoin businesses will continue to move into the mainstream financial sector, and in some cases will be game changers,” Fenton said.