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Opinion
Matt Levine

Bitcoin Banking Will Be Boring

New York's Ben Lawsky wants to take all the leverage, and fun, out of bitcoin operations. 

Here's my favorite part of New York Superintendent of Financial Services Ben Lawsky's proposed "BitLicense" regulations for companies that provide bitcoin services in New York:

Isn't that strange? Capital, in the usual financial sense, is just the inverse of leverage: Capital requirements determine how much leverage you can have. If you have an 8 percent capital requirement, then you can be 12.5 times levered. Saying "we'll decide how much capital you need based on how much leverage you have" is circular: How much capital you need determines how much leverage you can have.