This is the first digital currency business to receive a Trust Charter.
NYSDFS invited applicants to apply for a Trust Charter in March last year.
The only difference between a Trust Charter and a fully fledged bank is that the Trust company cannot receive deposits or give out loans. The process and application is almost the same with a minimum capitalisation requirement of $2m.
Interestingly, whereas the European Banking Authority has deterred credit institutions, e-money institutions from directly holding digital currencies, this Trust licence gives apparent permissions for itBit to act as a custodian of digital currency. An interesting contrast to the EU approach.
There has been some comment online about the jurisdictional and material scope of the Trust Charter. It seems that itBit will also need to apply for the Bitlicense once issued by the NY state department.
A major apparent advantage is that with the Trust Charter, the Trust company is seemingly able to operate freely in the other states; in contrast, those who have registered as MSBs have had to take a state-by-state approach. That said, there appears to be some doubt as to whether states such as California who are developing their own version of a digital currency licence will accept a Trust Charter as sufficient.
Tom Dresslar, a spokesman for the California Department of Business Oversight said:
Nonetheless, this is a strong signal that digital currency businesses are pioneering forwards now with further regulatory oversight and endorsement.