New York State Approves Signature Bank Blockchain Payment Platform

3 min read

A New York bank has received approval from local regulators for a digital blockchain payments platform.

The Department of Financial Services of New York (NYDFS) granted its approval to Signature Bank on 4 December. According to a press release, Signature Bank has the go-ahead to launch its platform called Signet in the state, which offers clients a 24/7, free-of-charge payment option.

It is essentially a peer-to-peer blockchain payment system for use between the bank’s clients, claiming to ”[eliminate] any dependence on a third party”.

NYDFS had several concerns about the platform prior to its investigation but is now reportedly satisfied Signet can comply with its rigorous regulatory expectations. This includes many of the standard know-your-customer (KYC) and anti-money laundering (AML) policies that all banks are subject to, as well as extensive consumer protection guidelines.

NYDFS superintendent Maria Vullo said the regulators were ”pleased to strengthen and foster regulated innovation” in the city while emphasizing that Signature bank would be operating ”through sound state regulation”.

New York’s financial regulators are not the only officials putting their support behind the platform. Signet benefits from coverage by the Federal Deposit Insurance Corporation (FDIC), a major US bank deposit insurance scheme managed by the government.

Signature Bank is relatively small, handling just 30 private clients and assets of around USD 45.87 billion.

The approval of Signet bodes well for other blockchain companies in the finance sector looking to operate from New York, which seems to looking to make its mark as an innovation-friendly city.

In mid-October this year, California-based cryptocurrency exchange Coinbase received approval for its digital asset custody solution in the state. Last month Ledger joined them, opening its own office with intentions of launching an institutional custody solution.

 

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Image Courtesy: Pixabay

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