Coinbase Gains New York Crypto Custody Approval
Coinbase has been licensed as a qualified custodian for digital assets by the New York Department of Financial Services (NYDFS).
New York regulators have given a green light to US-based cryptocurrency exchange Coinbase to establish a qualified digital assets custodial firm.
The New York Department of Financial Services (NYDFS) said in a press release on Tuesday that it had approved Coinbase's application to create a wholly-owned subsidiary called Coinbase Custody Trust Company. The license will enable the firm to store Bitcoin (BTC), Bitcoin Cash (BTH), Ethereum (ETH), Ether Classic (ETC), Litecoin (LTC) and Ripple (XRP) on behalf of institutional investors.
Notably, Coinbase already allows customers to buy and sell all of these cryptocurrencies apart from XRP. The coin’s presence in the list of assets supported on the new custodial firm may indicate a potential listing on the exchange in the future.
“New York continues to be a leader in creating, fostering, and responsibly regulating a financial services marketplace that promotes innovation, safeguards the industry and protects consumers through strong supervision,” said financial services superintendent Maria Vullo. “Today’s approval further demonstrates that the state regulatory system is the best arena in which to responsibly supervise the growing fintech industry within a sound and compliant framework.”
Hailing the NYDFS’s decision, Coinbase said in a blog post that it had met the banking standards regarding capitalization, anti-money laundering procedures, security, storage and privacy in order to obtain the license.
“As crypto continues its maturation as an asset class and more eligible financial institutions and hedge funds enter the space, Coinbase is committed to delivering products and services that are tailored to their unique needs. Coinbase Custody delivers the trusted storage service that our clients require to fully immerse themselves in the potential that crypto assets provide. We look forward to delivering more assets and features over the coming months,” the exchange added.
Coinbase is joining a number of industry peers which have recently gained regulatory approval to offer custody services. Last month, US-based blockchain security company BitGo received a public trust company status from the South Dakota Division of Banking.
Goldman Sachs and Citigroup are also reportedly preparing similar operations, as the availability of qualified custodians is seen as one of the essential services needed to increase institutional investments in the crypto space.