The State Banking Authority of New York says that Bitcoin exchange itBit has filed for a banking license; however, approval for the license may come in the next couple of weeks. Nonetheless, if the company is able to get the license, it will be the first Bitcoin company to be regulated as a bank in the United States.
According to the reports as itBit wants to expand, it is filing the application. Though right now, the company operates as an exchange where buyers and sellers trade the Bitcoin digital currency, once it gets banking license it will be able to show its presence in all corners of financial services. It will also be able to present itself as a trustworthy and reputable company.
In an October letter to New York`s state banking regulator on an unrelated matter itBit Chief Executive Charles “Chad” Cascarilla had said that some highly publicized failures and potentially illegal activity have focused attention on virtual currencies and have highlighted the need for a sound regulatory framework for virtual currencies.
However, his company is trying not just to diminish the chances of any failure but also build trust among users. The Bitcoin exchange operates in Singapore moved its primary headquarters to New York last year. Later on it hired Erik Wilgenhof Plante from eBay Inc as chief compliance officer.
Though a lot of issues regarding money-laundering and role in darkmarket come when Bitcoin comes to scene, itBit not just tries to be safe and secure for users but also a law-abiding company. For instance, it claims it has anti-money laundering credentials with the help of “know your customer.” It also complies with all jurisdictions in which it operates.
Getting Bank License Will Help the Bitcoin Exchange Further its Expansion
Even David Berger, CEO of the Digital Currency Council, an industry advocacy group, admit that whether fairly or not, companies that work within the regulatory framework are more trusted by customers and partners. Bank license in New York depends upon a lot of factors or requirements that the company needs to show to the authorities.
Nonetheless, the bank application for itBit Trust Company LLC lists three bigwigs in government and regulatory circles as “organizers,” including former Federal Deposit Insurance Corporation Chairman Sheila Bair, former Financial Accounting Standards Board director Robert Herz and former New Jersey Sen. Bill Bradley.
To contact the reporter of this story: Deepak Tiwari at email@example.com