Bitcoin Firm itBit Receives First Banking License in New York

Bitcoin Firm itBit Receives First Banking License in New York

It has taken several years, but Bitcoin is finally going mainstream in New York. The state’s banking regulator NYDFS issued its first banking charter to a Bitcoin exchange. The name of the firm is itBit, and it first applied for a banking license back in February.

Bitcoin is a virtual currency that has been around since 2008, and has taken off in popularity over the last two or three years. The idea of an inflation-proof digital asset that cannot be printed at will (bitcoins must be virtually “mined”) is very attractive to a broad spectrum of investors and economic skeptics. Note that bitcoins cannot be forged, but they can be stolen by hackers breaking into digital wallets where they are stored.

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Statement from NYDFS head

“The technology behind bitcoin and other virtual currencies could ultimately hold real promise and it is critical that we set up appropriate rules of the road to help safeguard customer funds,” commented Benjamin Lawsky, superintendent of financial services, in a statement on Thursday.

“Indeed, we believe that regulation will ultimately be important to the long-term health and development of the virtual currency industry.”

More on Bitcoin firm itBit receiving first banking license in New York

The granting of a banking charter means itBit can begin operating immediately and is officially under the supervision of New York’s Department of Financial Services.

Of note, the NYDFS is also in the process of finalizing the country’s first rules for licensing businesses involved in the digital currency sector. The new regulations are known as the BitLicense rules. ItBit will be required to follow those rules once they are finally approved.

According to Thursday’s statement, the NYDFS reviewed and approved the itBit’s anti-money laundering, consumer protection and cyber security standards before issuing the banking charter.

The statement also pointed out that the NYDFS continues to accept applications from other virtual currency companies for licensing approval.

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