New York has released a final framework for regulating digital currencies, requiring organizations that provide virtual currency services in the state to obtain a special license.

Only businesses that hold customer funds will need a so-called a “bitlicense,” said Benjamin Lawsky, superintendent of financial services for the state of New York, who discussed the regulations Wednesday during an emerging payments conference in Washington, D.C.

These regulations make New York the first state to introduce oversight for digital currency. The rules only apply to companies that do business in the state.

The “ossified payment system” needs to be updated, said Lawsky, adding he wants to permit innovation while protecting consumers and guarding against illegal activity.

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