Bitcoin gradually integrates into traditional financial system; Gets regulated in New York state

At a business conference in Washington, New York state's chief financial regulator, Benjamin Lawsky, introduced the final version of rules for businesses working in bitcoins.

The regulator also noted that the digital currency bears the new potential which can help drive changes in the ossified payments system.

Lawsky's office has worked for two years on stipulations requiring companies to obtain a special license if they use bitcoin or other digital currencies so that to prevent money laundering. Now, the 44-page rule book aims to add more oversight to the virtual currency that has gained in popularity and moved into the commercial mainstream.

Firms dealing in bitcoin would now need a special compliance officer to make sure the company followed the new rules.

"We are excited about the potential that digital currency holds for helping drive long-overdue changes in our ossified payments system," Lawsky said in a statement, Deutsche Welle reports.

"We simply want to make sure that we put in place guardrails that protect consumers and root out illicit activity - without stifling beneficial innovation."

The rules only apply to businesses operating within New York state, however they can have customers from all over the US except from states that object to the use of digital currencies.

From now on, bitcoin companies will not need prior approval from regulators for standard updates to software and apps.

Businesses will neither need approval for each new round of capital fundraising.