The New York State Department of Financial Services has established a new division specifically tasked with licensing and overseeing cryptocurrency startups.

The new Research and Innovation Division has been established to formally “support internal transformation and market innovation” within the state. Along with licensing and industry supervision, the division has been tasked to assess new efforts to use technology, identify and protect consumer rights and to encourage innovation in the financial services marketplace.

“The financial services regulatory landscape needs to evolve and adapt as innovation in banking, insurance and regulatory technology continues to grow,” Financial Services Superintendent Linda A. Lacewell said in a statement Tuesday. “This new division … position DFS as the regulator of the future, allowing the Department to better protect consumers, develop best practices, and analyze market data to strengthen New York’s standing as the center of financial innovation.”

New York has been at the forefront of cryptocurrency licensing in the U.S., having launched the BitLicense in 2015. While not always popular in the cryptocurrency community due to its strict regulations relating to anti-money-laundering, anti-fraud and cybersecurity policies, the license has slowly found favor among companies seeking to do business in the state. Recent successful applicants such as Square Inc., Robinhood Inc. and Tagomi Trading LLC bring the total number of BitLicense’s granted to just over 20.

In addition to the changes at the NYDFS, six new members have been appointed to the New State Digital Currency Task Force.

According to Cointelegraph, the new appointees Tuesday are Ethereum co-founder Joseph Lubin; Sandra Ro, CEO of the Global Blockchain Business Council; Yaya Fanusie, an adjunct fellow at the Foundation for Defense of Democracies; Yorke Rhodes, co-founder of Blockchain @ Microsoft; Ryan Zagonne, director of regulatory relations at Ripple; and Aaron Wright, a law professor at the Cardozo School of Law.

First proposed in June 2018 then formed in January, the task force is considering the “potential effects of the widespread implementation of digital currencies on financial markets in the state” as well as “studying the regulation, use, and definition of digital currency.” Under the terms of the task force, any findings and recommendations must be submitted to the state legislature by Dec. 15, 2020.

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