Today, Mari T. Vullo, financial Services Superintendent, reported that the New York State Department of Financial Services (DFS) has approved the application of Coinbase, Inc., a wholly owned subsidiary of Coinbase Global, Inc., to offer Ethereum and Litecoin for New York customers.
DFS has also approved Coinbase to offer users in New York to access “Shift Card”, a Coinbase linked debit card service.
“New York continues to lead the nation in fostering financial technology by responsibly promoting innovation and protecting consumers,” said Superintendent Vullo. “DFS has proven that the state regulatory system is the best way to supervise and cultivate a thriving fintech industry, like virtual currency. New York will remain steadfast in pushing back against federal encroachment efforts like the OCC’s proposal to impose a one-size-fits-all national bank charter that increases risk and seeks to usurp state sovereignty.”
DFS has rapidly responded to innovations by licensing technology based money transmitters under New York’s money transmitter law; online lenders under New York’s banking law; and virtual currency exchanges under New York’s financial services law. DFS issued a virtual currency and money transmitter license to Coinbase in January 2017 to offer services for buying, selling, sending, receiving, and storing bitcoin. Today, DFS authorized Coinbase to expand its service offering to include Ethereum and Litecoin.
The Ethereum network, which receives significant development contributions from Brooklyn-based ConsenSys, is a cryptocurrency and blockchain platform. Ether is the digital cryptography-based asset of the Ethereum network, similar to how bitcoin is the digital cryptography-based asset of the Bitcoin network. The Shift Card is a VISA debit card that allows Coinbase users in New York and other select states and territories in the U.S. to spend bitcoin anywhere VISA is accepted. Litecoin, developed as a modification of the Bitcoin protocol, is a well-known and long standing virtual currency that is nearly identical to Bitcoin. Litecoin was the first alternative virtual currency to bitcoin to launch and gain acceptance.
Brian Armstrong, Coinbase CEO and Co-founder said, “At Coinbase, our first priority is to ensure that we operate the most secure and compliant digital currency exchange in the world. New York is an important market and we look forward to expanding our services for New York customers as swiftly as possible.”
After rigorous review, DFS has approved five firms for virtual currency charters or licenses, while denying those applications that did not meet DFS’s standards. In addition to Coinbase, DFS has granted licenses to XRP II and Circle Internet Financial, and charters to Gemini Trust Company and itBit Trust Company. The companies that have received application denial letters ordering them to stop any New York operations are Disruptor Labs, LLC, ChangeCoin Inc., Ovo Cosmico Inc., Snapcard Inc. and OKLink PTE. LTD.