Instead of going through individual checks in each state, a company only needs to pass one single compliance check to obtain a license.
The American Association of State Banking Regulators, the Conference of Banking Supervisors (CSBS), is introducing a new regulatory regime for companies that operate in the financial services industry. According to Reuters, representatives from 48 of the 50 states supported the initiative.
CSBS is going to introduce a set of supervisory rules for the entire country. Now, in order to operate in a particular state, a company must obtain permission or even a license from local regulatory authorities. The clearest illustration of this situation is New York with a BitLicense, without which cryptocurrency companies cannot provide services to residents of this state.
The conference participants agreed that this approach is counterproductive: the resources that a company could direct to the development of security systems or other important initiatives are spent on regulatory compliance. The new regulatory regime should reduce compliance costs and simplify business scaling in the domestic market.
The procedure assumes that a company will need to pass one single audit instead of an individual audit in each state in order to obtain a license. Such checks will be carried out by a team of experts, which will include representatives of several states at once.
John Ryan who takes the position of CSBS President noted that the approach is not inferior in reliability to the existing one but significantly exceeds it in terms of efficiency. States will be able to exchange information on audits, with each administrative unit, if desired, can initiate an independent audit.
The new regulations will operate in 48 states and will be applied to 78 fintech companies, among which there are organizations dealing with crypto.