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New York state to mull bitcoin licensing proposal

Friday, 10 Jan 2014 | 2:51 PM ET
New York to hold bitcoin hearing
Friday, 10 Jan 2014 | 11:45 AM ET
State Financial Services Superintendent Benjamin Lawsky announces two days of hearings this month aimed at better understanding the virtual currency and how it should be regulated.

Want to do business with bitcoin in New York state? You might soon need a "bit-license."

Officials will hold a public hearing Jan. 28 and Jan. 29 at which investors, law enforcement officials and computer engineers will provide insight into virtual currencies. One of the aims is to determine whether businesses accepting or transferring bitcoin should be licensed, which is required of wire transfer services.

"We license MoneyGram [and] Western Union," Benjamin Lawsky, superintendent of New York state's Department of Financial Services, said in an interview Friday on "Squawk on the Street." "Should we have a special license when it comes to money transmission [with] virtual currencies and bitcoin?"

(Read more: Ultimately, bitcoin goes to zero: Dennis Gartman)

Benjamin Lawsky, superintendent of New York state's Department of Financial Services
Jin Lee | Bloomberg | Getty Images
Benjamin Lawsky, superintendent of New York state's Department of Financial Services

Virtual currencies had a coming-out party last year, when Congress held hearings on the potential dangers of anonymous, untraceable and nongovernmental "crypto-currencies."

Lawsky said New York must follow suit to understand how state laws apply to digital currencies and how innovation and security can be balanced.

(Read more: Bitcoin's four steps to Wall Street acceptance)

"The federal hearings have been largely about law enforcement efforts thus far," he said. "Our hearings are going to be a little broader."

—By CNBC's Jeff Morganteen. Follow him on Twitter at @jmorganteen and get the latest stories from "Squawk on the Street."

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