Coinbase To offer Custodian Service Following Approval by the New York State Department of Financial Services

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There are lot of positive news in the cryptocurrency community to thrill crypto lovers, this is even as the New York State Department of Financial Services (NYDFS) reportedly gave its seal of approval to Coinbase Custody Trust Company LLC, to run as “a limited purpose trust company”.

It is interesting to note that Coinbase Custody is owned and operated by Coinbase Global Inc. Following the seal of approval, Coinbase Trust will now commence custody services for cryptocurrency assets like Bitcoin (BTC), Ethereum (ETH), Litecoin (LTC), XRP, Ethereum Classic (ETC), and Bitcoin Cash (BCH).

While this is such a huge news in the crypto community, what many are surprised about is the fact that Coinbase would be providing custody services for XRP even though it has not officially listed the token on its exchange platform. With this development, many are already bracing up for a possible listing.

What this approval means is that Coinbase will now function almost like a bank. For people who have no idea, custodian services, allow firms to hold money on behalf of its customers with the aim of protecting customers’ investments from theft or loss of funds. It would be recalled that Coinbase officially kicked off its custody service in July with the sole aim of attracting institutional players while providing them the opportunity to participate in the cryptocurrency space.

According to the company:

“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.”

After receiving approval, COO Asiff Hirji couldn’t hide his excitement and noted that that the NYDFS has been “a strong advocate” for the “responsible growth of the cryptocurrency industry.”

Speaking further, the president noted that “Since 2014, the New York Department of Financial Services has proven itself to be a strong advocate in its support for the responsible growth of the cryptocurrency industry. 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. We applaud the leadership Superintendent Vullo has shown to guide the responsible growth of the cryptocurrency ecosystem and look forward to working with their offices in the future,”

Following the approval, Financial Services Superintendent Maria T. Vullo indicated that:

“New York continues to be a leader in creating, fostering, and responsibly regulating a financial services marketplace that promotes innovation, safeguards the industry and protects consumers through strong supervision. 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.”

With the cryptocurrency industry continuing to woo lots of institutional players, many cryptocurrency startup are beginning to delve towards providing custodian services. In September, cryptocurrency powerhouse BitGo received approval to operate its own custody services for digital assets.