New York's financial regulators has asked companies to send their proposals for setting up regulated exchanges for cryptocurrencies such as Bitcoin, Litecoin and Dogecoin. The reason for doing so is, according to the State Department of Financial Services, to protect consumers better and to avoid money laundering.
It is probably no coincidence that the state has decided to begin this process now, almost right after Mt.Gox has filed for bankruptcy. While it may seem like a good idea to regulate Bitcoins and other cryptocurrencies to bring some safety towards cryptocurrencies, it does go against what the cryptocurrencies has been created for.
"The fact is that virtual currencies are unlikely to disappear entirely," Benjamin Lawsky, Superintendent of Financial Services in New York said and continued:
"As such, turning a blind eye and failing to put in place guardrails for virtual currency firms while consumers use that product is simply not a tenable strategy for regulators."
The lack of regulations and control of cryptocurrencies grows concern among many financial institutions and governments, as it is nearly impossible to trace transactions being done. They would like to regulate the cryptocurrencies so that they can tax it accordingly and ensure that it is not being used for any criminal activities or similar.
But by doing so, what is the point of having cryptocurrencies? They were not created to be controlled and regulated by banks, financial institutions or governments for that matter. It was created to give the people a decentralized way of having funds, being able to do whatever they want without "big brother" watching every step they make.
While we are confident that New York and other states will try and regulate cryptocurrencies so that they can control everything as they are used to, we are also confident that the community will be able to ensure that Americans can continue to be completely anonymous when using cryptocurrencies.