BitLicense is a type of regulatory framework established by the New York State Department of Financial Services (NYDFS) for businesses involved in virtual currencies. Introduced in 2015, it aims to ensure consumer protection, prevent money laundering, and promote the integrity of the financial system.

To obtain a BitLicense, businesses must comply with various requirements, including maintaining specific capital reserves, conducting background checks on executives, and implementing anti-money laundering policies. The application process can be lengthy and costly, as it requires detailed disclosures and ongoing regulatory compliance.

The license is primarily designed for companies that engage in activities such as buying, selling, or holding virtual currencies, as well as those providing related services like exchange platforms or wallet services. While it aims to foster a safer environment for users, some critics argue it stifles innovation and imposes burdensome regulations on startups. As a result, a number of cryptocurrency businesses have opted to operate outside New York to avoid the complexities associated with obtaining a BitLicense.