New Jersey considers following New York in issuing regulatory licenses to provide protection for investors.

The legislative body in New Jersey is currently considering a new bill that aims to establish regulations for cryptocurrency-related companies and issue business licenses to ensure the safety of investors' assets while creating a favorable environment for the industry.

New Jersey Follows New York in Issuing Licenses

New Jersey Assemblywoman Yvonne Lopez introduced the "Digital Asset and Blockchain Technology Act" on February 20th. The bill aims to establish regulations for cryptocurrency business service providers, requiring them to disclose company registration names, anti-money laundering, counter-terrorism financing standards, as well as their licenses and legal records in the New Jersey Department of Banking and Insurance to create more investor-friendly protection measures.

The bill will require cryptocurrency companies to obtain a license before legally operating, similar to New York's requirements. In 2014, the New York Department of Financial Services introduced the BitLicense, making New York one of the most challenging jurisdictions for cryptocurrency-related companies to enter in the United States.

Proper Regulations to Protect Investors

Despite the Bitcoin boom happening three years ago, New Jersey, the fourth most populous state in the U.S., still lacks state regulations regarding cryptocurrency. Lopez emphasized the need to address these issues locally:

"People see and hear about Bitcoin in their everyday lives, but most are unsure of what it is. We must take steps to protect investors who wish to invest in cryptocurrency while allowing the industry to continue to grow and expand in New Jersey."

Furthermore, the bill requires cryptocurrency companies to disclose the terms and conditions of their investors' accounts and, like traditional bank account holders, be protected by the Federal Deposit Insurance Corporation (FDIC). Any applying company must provide a fee schedule and any information regarding the risks of investing in digital assets. Lopez further stated that unlicensed cryptocurrency operators must undergo federal-level scrutiny. With this law, investors will have a better understanding of the risks involved in investing in virtual currencies.

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