Rep. Steve Stockman: New York regulations could crush bitcoin industry

Texas Republican Congressman Steve Stockman is enthusiastic about bitcoin. Since announcing his bid for the senate to unseat incumbent John Cornyn, his campaign has incorporated bitcoin into its financing model, a move that established a precedent for other political hopefuls. He’s worried now, though.

Stockman made his concerns over New York’s extensive digital currency regulations public. If the New York Department of Financial Services (NYDFS) does move ahead with its planned rules then it could very well hurt the bitcoin industry, particularly startups.

BitcoinAccording to Stockman, the proposed regulations are too arduous and it will be too much for bitcoin entrepreneurs to imbibe no matter how much the bitcoin community tries to spin these schemes. Rather than having states become too heavy-handed they should embrace cryptocurrencies, avers Stockman.

Stockman presented the case that the regulations being installed benefit the very business sectors that bitcoin poses a threat towards. This has been a theory put forward by many in the cryptocurrency industry. If the proposals are approved, says Stockman, then banks, payment systems and financial services providers will not face the same level of inspection as bitcoin will.

Instead of having the government intervene and institute fierce regulations, the bitcoin industry should instead regulate itself because otherwise it’ll lack of innovation and progress, much like the healthcare system, which he says when the government intervenes it deters advancements and investments.

“Many [doctors] are dropping out of the profession because it’s overregulated,” noted Stockman. “Now, what may happen to the bitcoin community is that, if there’s so much regulation, there’ll be a lot of people who say, ‘You know what, I’m done with this. I’m not gonna do it,’ and it’s going to crush the industry.”

In the end, the only entities to benefit from the NYDFS’s rules will be the banks that face stiff competition from bitcoin and other virtual currencies. But the lack of concern among some bitcoiners is just as worrisome, alluding to a recent appearance at the The North American Bitcoin Conference (TNABC).