'Transitional BitLicense' for Bitcoin will allow start-ups to trade in New York

New York’s Department of Financial Services (DFS) is considering creating a special type of bitcoin license called a “Transitional BitLicense,” which would let certain small businesses and start-ups operate within a more flexible framework, according to the department’s Superintendent, Benjamin Lawsky.

Lawsky is due to make the announcement on Sunday night at the Money 20/20 conference in Las Vegas. The initial comment period for the proposed BitLicense framework ended on Oct 21, 2014.

The DFS is also designating a small group of specialised examiners to deal with start-ups and their license applications.

Earlier reports had suggested that banks in the European Union should refrain from offering customer accounts in virtual currencies like Bitcoins until regulatory safeguards were in place. Crypto-currencies such as Bitcoin should not be considered as money or a foreign currency when it comes to taxation, Australia’s tax authority ruled out in August.

Bitcoin, the best-known virtual currency, started circulating in 2009. Its present market value is around $8 billion, with up to 80,000 transactions occurring daily, according to accounting firm PriceWaterhouseCoopers LLP. Earlier this year, Mt. Gox, a bitcoin exchange in Tokyo  shut down its website  and had annonuced bankruptcy. In its bankruptcy filing, Mt. Gox also said $28 million was “missing” from its Japanese bank accounts.

With inputs from Reuters