New York is to change legislation to make allowances for digital currency at the same time as it considers tougher measures to prevent money laundering.
The superintendent of the state department of financial services, Benjamin Lawsky, told a Washington conference on Bitcoin that rules were to be adapted to license digital currency.
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Lawsky said: "We do not have to throw out all of our existing rules for money transmitters or banks, which have generally served consumers well when vigorously enforced.
"Certain aspects of virtual currency could dovetail with existing regulations."
Bitcoin users have previously called for the state department to avoid implementing stricter regulations that could dash the cryptocurrency’s chances against the likes of payments giants Visa, MasterCard and JP Morgan Chase.
The financial services department has also come under pressure from law-enforcement officials to impose anti money laundering legislation on businesses using Bitcoin.
Lawsky said: "New York will likely have to proceed with issuing some form of specially tailored BitLicense that adapts those rules to the world of virtual currency."
He said KYC or "know-your-customer rules" will be key to preventing fraud using digital currencies.
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