US-based cryptocurrency exchange platform Bittrex has confirmed a partnership with several financial institutions that will allow select clients in the US to pair BTC/USD, as well as connect pairs for ‘stablecoins’ Tether and TrueUSD.
As reported by Bloomberg, the agreement will allow for now predominantly corporate clients in a limited number of states to purchase the nearly 200 digital tokens offered on the platform, using the US dollar directly.
Bittrex is working closely on the deal with New York-based Signature Bank alongside several other financial firms. Signature Bank will be responsible for holding the dollar-denominated funds.
Banks, regulations cryptocurrencies
Bittrex CEO Bill Shihara recently commented on the impact he suspects that this will have on the relationships between banks and cryptocurrency.
”It’s been a long path. It’s not just about banks being able to trust Bittrex. It’s about banks being able to trust crypto in general. And I think it’s really showing that crypto is turning the corner in terms of mainstream acceptance,” he said.
Purchasing cryptocurrencies directly with fiat currencies is becoming increasingly difficult as anti-money laundering (AML) regulations and know-your-customer (KYC) policies are being enforced by a growing number of governments.
These policies have in part contributed to a negative reputation that the cryptocurrency industry is paired with, disincentivizing many predominant financial institutions from offering related services for fear of risking their reputation.
While that is changing (notably Goldman Sachs announced earlier this month they are launching a Bitcoin trading desk), Bittrex’s actions are an important step in moving away from platforms that offer only ”crypto-to-crypto” services, meaning no fiat currency is involved in transactions.
Bittrex has confirmed that it plans to extend the offering to retail customers in the foreseeable future.
Several other banks have administrated similar deals. Prominent US cryptocurrency exchange Coinbase has reportedly developed close working relationships with Cross River Bank, Metropolitan Bank and Silvergate Bank in the US, recently securing a Barclays PLC bank account in the UK.
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