Another day and another milestone for cryptocurrency regulation once again coming out of one of the worlds most renowned financial hubs New York City. It’s a city filled with men of power and many crypto enthusiasts recently breathed a sigh of relief and happiness as Coinbase recently acquired a license from the New York Department of Financial Services yesterday, Tuesday the 23rd October.

As per a press release from the NYDFS, Coinbase, a crypto startup with roots in San Francisco are now eligible to legally launch the Coinbase Custody Trust Company or CCTC, a new subsidiary with a sole focus in cryptocurrency asset custodian solutions for their clients. Along with this very positive regulatory step, the press release also noted that the CCTC will also be classified as a fiduciary under the states banking laws, which of course will further cement Coinbase’s legitimacy in the growing sector that is cryptocurrency.

Custodial Support?

Maria T Vullo, the NYDFS’s superintendent, also announced along with the abovementioned announcements that the CCTC will be able to offer custodial support for the following digital currencies: Bitcoin (BTC),Bitcoin Cash (BCH), Ethereum (ETC), Ethereum Classic (ETC), XRP and finally Litecoin (LTC)

Sam Mcingvale, product lead at the Coinbase custody branch, issued a follow-up post in which it explained in layman’s terms what this NYDFS approval means for the fintech firm reminding readers that Coinbase Custody is an “institutional-grade service” which has had optimization implemented in order to secure millions in cryptocurrency.

Coinbase has seen previous success with their custody arm and the previously-limited product roster, but Mcingvale has noted that they now have proper authority to expand upon their services.  He went on to add that the firm now has authorization to “compliantly store more assets and add new features like staking.”

Mcinvale ended off his statement by pointing out that the newly-established NYC based subsidiary is technically a “standalone, independently-capitalized business.”

Of course, it must be noted that this could be seen as potentially harmful to Coinbase’s internal corporate hierarchy but Mcingvale argued that the CCTC’s independence could be seen as a positive for potential investors due to the fact that the subsidiary will “be held to the same compliance, security and capital requirements as traditional fiduciary custodial businesses.”

Mike Novogratz: Crypto Custody To Usher In Institutional Investment:

While the news about Coinbase’s recent move to offer custody is a pinnacle in the world of the crypto regulation, they are in no way alone in this. Last week saw Boston based Fidelity Investments reveal that they had entered the crypto market by the establishment of Fidelity Digital Asset Services or FDAS for short which is the company’s digital currency offshoot with one Tom Jessop is head and they are set to provide top-of-the-line crypto custody to the firms 13 000 strong institutional clients.

Both these moves from Coinbase and FDAS are important of course as argued by CEO of Galaxy Digital Mike Novogratz but it must also be noted that Fidelity’s move to offer custodial services will more than like have a greater & more meaningful impact on the industry. The prominent figure in the crypto world had this to say:

“One of the things that will get institutional investors involved in crypto is custody solutions… And Fidelity is coming out with a world-class custody solution that is aimed at institutions, so that’s a box that gets checked and [that is] something that gets taken [an institution’s] list.”

It’s also very important to note that the two abovementioned firms are not the only pioneers in the custodian race. Notably, Novogratz and Galaxy Digital, as well as Wall Street’s behemoth Goldman Sachs, recently invested a whopping $15 million into the Palo Alto-based BitGo in an effort to assist with the startups very ambitious goal of creating their$1 trillion crypto wallet.”

At this stage, it’s anyone’s guess which of these crypto custodian subsidiaries will end up with the king’s ransom of institutional clients, but the ever-increasing competition within the crypto realm will more than likely give birth to some pretty amazing products to come in the foreseeable future.

Which of these newly-formed cryptocurrency custodians do you think will be the most successful? Let us know your thoughts by commenting below.

Follow CoinBeat on FacebookTwitter & Telegram
Subscribe to our CoinBeat Newsletter
Submit an article to CoinBeat
View live Marketcap Prices here

More Stablecoins, Mate

Previous article

Zcash’s Next Upgrade Could Make Their Transactions 6 x Faster

Next article

You may also like

Comments

Comments are closed.