New York DFS approves virtual currency license application of Coinbase
This is the fifth virtual currency business entity to receive a regulatory nod from the Department of Financial Services to operate in New York.
The New York State Department of Financial Services (DFS) has taken the number of licenses issued to virtual currency entities to five, with the latest such permission granted to Coinbase, Inc., a wholly owned subsidiary of Coinbase Global, Inc.
DFS has announced its approval of the application of Coinbase for virtual currency and a money transmitter license. The approval follows a detailed review of Coinbase’s applications, including the company’s anti-money laundering, capitalization, consumer protection, and cyber security policies.
The move comes as the body has been seeking to respond adequately to the challenges of fintech innovation.
Back in March 2014, soon after the collapse of MTGOX, the regulator has recognized the need for stricter oversight of virtual currency exchanges and issued a public order initiating a process for accepting licensing applications for virtual currency exchanges under the New York Banking Law.
Thus far, DFS has given its nod of approval to five firms for virtual currency charters or licenses. In addition to Coinbase, DFS has issued licenses to XRP II and Circle Internet Financial, as well as charters to Gemini Trust Company and itBit Trust Company.
As per London Stone Securities’ forecasts for 2017, bitcoin is a key topic for this year.
One of the major factors to consider in this respect is the Indian influence, especially given the November 2016 decision by prime minister Narendra Modi to pull Rs500 and Rs1000 notes from circulation in an effort to fight corruption and terrorism. As a result of this step, the weekly volume of bitcoin trading in India has jumped nearly twofold from prior levels. More and more people there are becoming adopters of the new technology, with London Stone Securities forecasting that this trend will persist this year.
The situation in China is also important to consider, as the Yuan is weak, and investors, speculators and ordinary citizens are aware that a key change is about to happen. This explains the rise in adopting Bitcoin in China. Furthermore, China seeks independence from the US Dollar and Bitcoin presents a genuine alternative.
Talking of Bitcoin’s role in global terms, Russia’s position is essential too, of course. However, the Central Bank of Russia is very strict concerning the virtual currencies themselves regarding them as means of funding terrorism. On the brighter side, the Bank of Russia is exploring the possibility of using innovative fintech solutions like blockchain.