New York Regulator Allows Coinbase Trust to Offer Custody Services for Six Cryptocurrencies
The New York Department of Financial Services (NYDFS) has approved the application submitted by Coinbase Global Inc. to allow its wholly-owned subsidy Coinbase Custody Trust Company LLC, to operate as ‘a limited purpose trust company.’
As a part of the approval, Coinbase Trust will now be able to store Bitcoin (BTC), Ethereum (ETH), Litecoin (LTC), Ethereum Classic (ETC), Bitcoin Cash (BCH), and Ripple (XRP). Notably, while Coinbase already allows customers to buy, sell or trade the first five of the cryptocurrencies mentioned above, it does not currently offer XRP on any of its trading platforms. The inclusion of XRP in the list of assets supported on the new custodial firm may be considered as a very positive step for the coin’s future.
Hailing the NYDFS’s approval of the license to Coinbase Trust, Asiff Hirji, COO and President, Coinbase said,
“The New York State Limited Purpose Trust charter, which now enables Coinbase Custody to act as a Qualified Custodian for crypto assets, builds on our unparalleled success as a crypto custodian while holding the company to the same exacting fiduciary standards and oversight of other, mature financial institutions operating in New York.”
He also praised the NYDFS for being a ‘strong advocate’ facilitating the growth of the cryptocurrency sphere.
Meanwhile, Maria Vullo, Financial Services Superintendent of Coinbase added,
“Today’s approval further demonstrates that the state regulatory system is the best arena in which to responsibly supervise the growing fintech industry within a sound and compliant framework.”
Back in August, Sam Mcingvale, Product Lead at Coinbase Custody had stated, “Coinbase Custody is exploring a range of new assets… We’re hard at work to add support for all ERC20 tokens.”
Recently, Coinbase had also announced its support for USDC, a stable coin it claims to be ‘fully collateralized by US dollars and supported by Coinbase and Circle.’
Coinbase Custody was officially launched on July 2 this year. This service strives to provide solutions for storing large amounts of cryptocurrency while providing its customers with a conducive environment to participate in the crypto market. Its target customers include institutions, hedge funds, initial coin offering issuers, and cryptocurrency exchanges.
At the time of launch Coinbase said:
“Coinbase Custody is a combination of Coinbase’s battle-tested cold storage for crypto assets, an institutional-grade broker-dealer, and its reporting services, and a comprehensive client coverage program.”
“Coinbase Custody Trust Company will operate as a standalone, independently-capitalized business to Coinbase Inc. and will be held to the same compliance, security and capital requirements as traditional fiduciary custodial businesses.”
With the license to offer custodial services for six main cryptocurrencies, Coinbase Trust now joins industry peers like BitGo, Northern Trust and Prime Trust who recently gained similar status. Goldman Sachs and Citigroup are also reportedly preparing for operations on these lines.