Facing explosive growth in NFTs and cryptocurrencies coupled with vague regulations for the wave of new financial technology and investment startups in Washington, the state recently announced a new Center for FinTech Information to warehouse in one place licensing guidelines and regulations.
Contained within the umbrella of the Washington State Department of Financial Institutions, the center will provide information about working in the state as a regulated business; list the financial laws, rules, and regulations related to money transmission, securities, lending, or banking; and assist applicants the licensing process, according to its website.
“We are doing everything we can to help innovative companies be successful in Washington state,” Director Charlie Clark said in a news release. “This dedicated program is a natural outcome of our desire to be helpful, transparent, and efficient in our regulatory work.”
Maybe so, responded tech leaders, but the state should not rest after simply setting up a regulations FAQ online. Arry Yu, the chair of the Washington Technology Industry Association’s blockchain council, said the CFT is a good first step but not terribly useful if it stops where it is today.
New fintech startups, she said, could save tens of thousands of dollars if the center could provide information that puts potential new businesses at the “80/20 ratio” from a licensing and regulatory standpoint. “The information on the site should be able to get a new business 80% of the way there,” she said.
Then they can get help — attorneys for example — to “custom fit” the remaining 20%, she added. “It needs to get significantly easier.”
Yu said the center should look away from California and more toward Wyoming as a model. California produced a blizzard of links and general information for its online version of the center but then seemingly walked away from any additional regulatory help, Yu noted.
Wyoming, she added, was a completely different story.
She relayed the story of the owner of a potential Washington startup who a strung together sizeable group of investors for a cryptocurrency investment fund. He was having a tough time getting clear direction in-state so he turned to Wyoming’s fintech sandbox.
“He paid a $300 fee and was licensed online,” Yu said. “The ideal (situation) is for an entrepreneur to be able to go to a site and go through the whole process from a website.”
The Seattle region is not exactly a hotbed for crypto, though a group of tech leaders are trying to help the area morph into a fintech hub. There are some crypto startups such as Strix Leviathan, Bittrex, Unikrn, Coinme, Stably, and CryptoSlate; many are part of the Cascadia Blockchain Council established by the WTIA.
The state Department of Financial Institutions didn’t return calls seeking comment. You can read the WTIA’s blog post on the new fintech center here.
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