On June 13 New York state’s financial authority has officially approved the company Ripple Labs for the regions BitLicense. This means the business can offer money transmission services and digital currency solutions within the state.
After much review, the New York State Department of Financial Services department said Ripple Labs is clear for operations after it had passed regulatory compliance standards. New York has become the first state in the United States to impose a formal license for cryptocurrency operators within the region. A few exchanges and services have received the approval so far such as the Boston-based Circle financial, but there are not that many approvals so far. Ripple Labs will be the first blockchain-based operations approved for the licensure. The acting Department of Financial Services Superintendent Maria T. Vullo had this to say in the announcement:
“DFS is pleased to continue to foster the growth of the New York virtual currency marketplace,”
Ripple’s operations consist of financial services and it’s native currency XRP which is focused on working with legacy financial institutions, banks, and settlement clearinghouses. Just recently Ripple announced a pilot program with the Expertus Payment Platform. The program is to enable financial institutions the testing grounds for using blockchain technology and eventually apply it to the bank’s or financial management service’s current architecture. Steve Mollenkamp, Head of Channel Sales at Ripple said, “Joining forces with partners like Expertus allows us to make it even easier for banks and their customers to realize the benefits of distributed financial technology. The newly launched pilot program will contribute to the growth of the Ripple network, enabling even more financial institutions to improve their cross-border payments.”
With the newly acquired BitLicense, Ripple will be able to work with the vast amount of banking institutions located within the state as New York is often considered one of the biggest financial capitals in the world. The firm has filed for its license under the name, XRP II LLC, which has the backing of prominent tech investors such as Google, IDG Capital, and Andreessen Horowitz. The license allows the sale and custody of XRP within the state’s borders and can offer services to clientele located in New York. When receiving the approved BitLicense Ripple co-founder and CEO Chris Larsen told press:
“Earning the BitLicense is an incredible validation of the institutional use of digital assets by DFS, one of the most influential state regulators. I’m proud of the work of our regulatory relations team, led by Ryan Zagone. With the BitLicense in hand, we look forward to working with our New York bank customers seeking to use XRP for liquidity and cost savings.”
The Ripple blockchain was established in 2004 well before the inception of Bitcoin. The currency has its share of critics for being so centralized asking its users for identification in some cases to operate with its system. Alongside this, the protocol has been criticized for having a “freeze” feature which essentially could cease the operations of the entire network. Much of this information was deleted from the internet and cannot be easily found within a casual search. However, a full description of the global freeze process is described within the internet web archives. Despite this, it’s not really new information that the company operates with regulatory procedures and in a centralized manner. Otherwise, it most likely would have had a more difficult time acquiring the license.
Images: Crypto-graphics.com, and Ripple Labs Logo