The global Bitcoin exchange itBit has applied for a banking license with the New York Department of Financial Services (NYDFS). According to a Reuters report, approval for the license is expected in the next couple of weeks, which could make itBit the first Bitcoin company to be regulated as a bank.
The spokespersons for itBit and New York’s department of financial services have confirmed that the company had put in an application for the banking license however, the global Bitcoin marketplace hasn’t released an official statement yet.
Under the leadership of Charles “Chad” Cascarilla, the company is looking to branch out into different sectors of the financial services industry, other than operating as a Bitcoin exchange.
Founded in 2012, itBit has offices in two key financial markets, Singapore and New York.
The company’s filing lists three prominent names as “organizers,” including Federal Deposit Insurance Corporation (FDIC) Chairman Sheila Bair, ex-Financial Accounting Standards Board (FASB) Director Robert Herz, and former New Jersey Senator Bill Bradley.
The technology behind the virtual currency Bitcoin i.e. the blockchain, which is a public ledger of all the transactions in the Bitcoin network, has been generating keen interest from leading companies like IBM, in the anticipation that the technology can be applied to several other, more effective uses.
Jeff Neuburger, a partner at Proskauer Rose said, “Many people believe that the real payoff with the Bitcoin phenomenon is blockchain and all the various uses it can be put to. It will have some impact on the way all kinds of financial services are conducted.”
When the company receives the nod to commence banking operations, the technology experts would be closely watching if the company is able to innovate the traditional banking functioning using its understanding of the blockchain technology, which allows for speedier and cheaper processing of payments.