NY Regulators Approve First Blockchain Payment System at Major Bank
New York’s Department of Financial Services (NYDFS) recently authorized a blockchain-based digital platform for the regulated exchange of funds. The project — dubbed Signet — will be launched by a fully-regulated New York financial institution, the New York Signature Bank. On December 4, NYDFS Superintendent Maria T. Vullo announced that the Department would allow Signature Bank to offer its own virtual payment platform to clients throughout the state.
Halo Platform is committed to seeing the expansion of blockchain technology within the financial sector and beyond. While some may find it concerning that big financial institutions are taking this grassroots technology for their own gain, it’s always good to see more people using cryptocurrency and blockchain tech.
Historical Approval Rides on Stipulations
After conducting a stringent analysis of the bank’s platform and its investor protection systems, the NYDFS awarded Signature Bank a permit allowing the bank to move forward with the launch and development of its blockchain-based real-time payment system. The final platform will undergo a rigorous inspection by the regulator’s examiners and independent consultants before it goes live to the public, which demonstrates the potential positive impact that effective regulation can have on cryptocurrency markets.
The Signet Platform will be jointly developed by Signature Bank and trueDigital Holdings, LLC, a New York-based crypto firm focused on building financial structures around blockchain technology. The blockchain-based system is structured to allow funds to be transferred between two commercial clients from Signature bank in real time. It works by quickly converting U.S. dollars into tokens, or Signets, in a manner that is compliant with Ethereum’s ERC-20 standard. The system utilizes blockchain technology to allow its clients to transfer money at their convenience, 24-hours a day, seven days a week, without any transaction fees.
The Signet approval makes history. It is the first blockchain payment system of its kind to have attained regulatory approval in the state of New York. However, approval rides on Signature Bank’s ability to comply with a few conditions, which were designed to ensure that the bank is maintaining robust, up-to-date policies and procedures to minimize user risk and fortify compliance with New York’s strict anti-money laundering and fraud laws.
The Signet Platform is Part of a Bigger Plan
The Signet Platform will only be available to Signature Bank customers for the time being, but this early blockchain innovation is part of a much larger plan. The bank is on track to eventually have the capability to connect to with any user without the need of an intermediary.
The banking industry is evolving rapidly, and if banks are going to survive the cryptocurrency movement they need to hop on the blockchain track before it’s too late. They’re already facing increasing competition from companies who have been working with cryptocurrency and blockchain technology for years now — including Halo Platform. Halo Platform has built its own blockchain, and it’s lightning-fast. The big banks are seeing some competition from up-and-comers like they never have before, and Halo Platform is right there gunning for them!
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