- They will launch the service on January 1, 2019
- Transactions will be secure and will be devoid of third parties
- New York State has taken a leading role in blockchain adoption
New York-based Signature bank is launching digital payment system in early 2019. The blockchain-based platform will help to streamline real-time payments.
Massive Impetus to the Blockchain Ecosystem
The New York Department of Financial Services (NYDFS) gave the approval to Signature Bank to operate the digital platform via an official press release on December 4, 2018. The platform is being developed in partnership with trueDigital Holdings LLC, a New York-based firm that specializes in exchange and settlement technology using blockchain infrastructure.
The Signet platform that will be unveiled any time from January 1, 2019, will allow the bank’s commercial clients to execute transactions in US dollars 24 hours a day, seven days a week, and 365 days a year.
The approval by DFS requires the bank to meet strict conditions that include ensuring the bank maintains tough policies and procedures that will address attendant risks while ensuring it complies with New York State’s banking standards and regulations on anti-money laundering, anti-fraud and consumer protection. NYDFS superintendent Maria T. Vullo stated:
“DFS is pleased to strengthen and foster regulated innovation in New York’s burgeoning financial technology sector, specifically within our state-chartered banking system, […] New York continues to support and help advance innovation through sound state regulation and with products such as Signet, which provide lower-cost ways for businesses to efficiently make payments.”
According to Signet Bank, all the transactions will become secure, will not require transaction fees and will be free from their parties, meaning customer will send funds directly to one another. There will be a minimum account balance requirement of $250,000 for the bank’s clients and deposits held within the Signet platform are eligible for FDIC insurance.
New York Regaining Status as the Global Crypto Hotbed
Commenting on the development, Signature Bank’s president and CEO Joseph DePaolo expressed gratitude saying it was gratifying to receive approval from the regulator adding that regulated innovation had helped his institution develop its platform. He further added:
“The ability to transmit funds between approved, fully vetted commercial clients of the Bank at all times is very valuable, especially in light of the increasing speed and frequency at which they conduct their business. […] The Signet Platform is indicative of this investment along with the implementation of new systems for loan operations, credit approvals and foreign exchange.”
That New York state has taken a leading role in America’s blockchain industry is evidenced by crypto hardware Ledger’s opening an office there in November to develop an institutional custody offering vault and Coinbase’ approval to offer custody service in the state in mid-October besides Coinsource’ licensing to operate Bitcoin ATMs in New York.