ItBit Became The First Cryptocurrency Exchange To Receive A Banking License

The New York State Department of Financial Services (NYDFS) decided to grant bitcoin exchange itBit a banking trust charter this week, marking a major step forward for the cryptocurrency.

On Thursday the company announced its plans to sign up US customers following the decision, though the company's final license isn't expected until the end of May.

A Big Leg Up

The charter gives itBit a leg up against other bitcoin exchanges working to operate across the US as it gives the company a bank-like status which makes itBit responsible for consumer funds without the need of a third party bank.

NYDFS Superintendent Benjamin Lawsky has been working to create new regulations for the bitcoin industry as it continues growing.

He spearheaded a push to create a BitLicense, which could become a reality by this summer. However itBit instead applied for a trust company charter, which is believed to have even stricter rules than a BitLicense would.

Certified Safe

ItBit is the first New York-based trust company to be created since the financial crisis and the extensive work involved in applying for the charter has taken the company more than a year to complete.

The NYDFS looked into the company's consumer protection practices, cybersecurity standards and anti-money laundering safeguards before granting the license.

High Standards

ItBit CEO Chad Cascarilla told CNBC that the license will allow the company operate in all 50 states and give customers a safe, secure bitcoin experience.

Cascarilla said itBit's status as a trust company will give them a leg up against competitors as it will improve the company's standards of care to a level "that's totally different from where any one is currently."