New York state regulators on Friday approved a key license for Bakkt, a venture designed to make it easier for consumers to store bitcoins and pay for purchases in the cryptocurrency.
The New York State Department of Financial Services said it granted a charter allowing Bakkt to become a limited trust company. Bakkt had filed with the DFS to become a trust company back in March.
The move allows Bakkt to hold bitcoin and other cryptocurrencies on customers’ behalf while abiding by regulations aimed at ensuring investors’ assets are kept safe. Bakkt is being spearheaded by Atlanta-based
best known for owning the New York Stock Exchange.
ICE said last year that it aimed to launch the first building block of the Bakkt platform—a bitcoin futures contract—in November 2018. Futures are financial tools that firms can use to protect themselves against swings in prices—in this case, against changes in the bitcoin-dollar exchange rate.
The approval will also allow Bakkt to launch physically delivered bitcoin futures contracts. Physically delivered contracts mean firms trading ICE’s futures would settle gains or losses by accepting bitcoins or delivering them to Bakkt’s “warehouse”—essentially, a secure digital vault for the storage of crypto-assets.
“With the comprehensive regulatory review and approval of Bakkt Trust Company complete, we are pleased to serve as a qualified custodian of bitcoin for physically delivered futures,”
the operating chief for Bakkt said in a statement.
The New York State Department of Financial Services has approved 22 charters or licenses for companies in the virtual currency marketplace, the agency said.
“As the financial services industry rapidly evolves, DFS will be at the forefront of fostering a sound, regulatory environment that continues to uphold New York as the premier place to do business, while protecting consumers and markets,” financial-services superintendent
said in a statement.
Last October, San Francisco-based Coinbase Inc. won a similar trust-company license from the DFS. The process of getting that approval took Coinbase about half a year, The Wall Street Journal previously reported.
Write to Patrick Thomas at Patrick.Thomas@wsj.com
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