Crypto 1.0’s Original Regulator Is Preparing For Web3
Perhaps no regulator in the world has been at the forefront of the cryptocurrency industry than the New York Department of Financial Services (NYDFS). From holding its first virtual currency hearings in 2013 to the creation of the famed “BitLicense” in 2014, which was the first bespoke piece of regulation focused on crypto in the country, the NYDFS has played an outside role in the development of crypto across the world.
As we are preparing to enter a new stage of industry development due to the advent of Web3, increased regulatory pressure as a result of the LUNA/UST collapse, and more institutional money coming into the space I reached out to NYDFS Superintendent Adrienne Harris to get her thoughts on how the NYDFS has grown and adapted to changes in crypto. She also shed some interesting insights on how the agency is scaling up and building out its expertise to track everything from stablecoins to NFTs.
I spoke to Harris on the sidelines of Chainalysis’ Links conference in New York City on May 19.
Forbes: To start off, could you give me a quick rundown of what you spoke about on stage?
Adrienne Harris: We covered a wide range of things. We talked a lot about the DFS and what we do, regulating about 80 foreign banks—17 of the 30 G-SIBs (global systemically important banks)—in addition to state-chartered banks and insurance companies. It really is a preeminent global financial regulator just by virtue of being here in New York, and we have such a broad purview of the financial services space, from student lending all the way up to the largest and most important financial institutions in the world. We obviously talked quite a bit about crypto, including our internal transformation initiative around our licensing with the BitLicense and the limited purpose trust charter. We call that transformation initiative VOLT for “vision, operations, leadership and technology.”
We’re working very hard to maintain DFS’s role as the preeminent digital asset regulator. As you know, DFS was the first to regulate the sector, and we continue to improve and do new things, like our blockchain analytics guidance. We’re soon to put out some stablecoin guidance that we’ve been working on for a while. So, in terms of vision: maintaining that status as the preeminent regulator and cementing New York’s place as the financial capital.