I think there is the possibility that this could be the end of the road for cryptocurrencies in the USA, from a practical standpoint.
Why? It was already the case that Bitcoin exchanges had to implement Know Your Customer (KYC) for USA.. doesn't sound to me like this is saying anything new in that regard.
These new rulings will affect many merchants also.
I suspect it will take a few days before the realizations sinks in as to what has happened.
Merchants are exempt according to Lawsky. A merchant isn't the same as a payment processor. Why can't the merchants handle the bitcoin and immediately send them to coinbase or bitpay for them to instantly convert it?
What's this going to do to BTC in the states? My opinion is fee's for places like Coinbase, etc. will increase dramatically, eliminating any benefit BTC might have been useful for in the past. Most of the exchanges will likely simply refuse to work with US-based customers and unless customers are willing to break the 'law' by using non-authorized outlets we will see bitcoin ultimately die the slow death or eventually get taken over by the central bankers and hedge fund masters to be used as the underlying replacement to the USD for international trade. Specifically for oil I'm thinking.
Bitcoin might not be the 'Peoples Currency' for much longer.
Fees will rise. Competition will fall or exit. Less competition, less innovation, more centralization.
This is the job of regulation.
If you've ever gone diving, you know the value of a regulator to control the flow from a high pressure tank into your soft pink lungs. Regulators have a place, but when it doesn't even let you breath air it has failed.
That this is done in the name of "consumer protection" is the greatest tragedy. It leaves the consumer more naked and helpless than ever and with fewer choices.
The regulation runs counter to its own claimed policy goals. It is killing its diver. It has failed.
