New York Financial Regulator Approves Blockchain-based Payment System



Last Updated: December 6, 2018 at 1:31 AM EST
blockchain based payments new york

On Tuesday, December 4, the Department of Financial Services (DFS) approved the use of a digital payment platform by the New York State-chartered Signature Bank. This platform is called Signet, and it is based on Blockchain technology. Accordingly, customers of this Commercial Bank will be able to transfer money right from Signet and without any transaction fees.

DFS Says Transactions Can be Made at Any Time of the Day

DFS’s press release states that these transactions are not limited to any time of the day, week, or year, and as such, they can be carried out at all times. Therefore, two customers can transfer money between themselves without the control of a third party. As a result, payments will be delivered instantly.

The financial regulators of the state also revealed that its aim is to bring about innovation in the banking sector. One way it makes that possible is by setting up regulations which will help in fostering the growth of Blockchain technology. This is a technology that helps to lower transaction cost and allow payments to be made more efficiently.

Signature Bank, Reputably Known in New York

The financial institution in question, Signature Bank, has 30 offices in New York alone. They can be found in cities like Brooklyn, Manhattan, Queens, Westchester, the Bronx, Long Island, Staten Island, and Connecticut. The publication revealed that this Bank currently has $45.87 billion in assets.

Although Signature Banks’ digital platform has been approved, the financial regulators will strictly monitor its use. DFS outlined that this is to ensure that the New York markets and consumers are protected at all times. In accordance, the said institution must adhere to DFS’s regulations regarding anti-fraud, anti-money laundering, and customer protection.

Bank Must Adhere to DFS’s Regulations

Most of the guidelines listed for the Bank to adhere to were majorly focused on customer protection. One of such is for the bank to follow the cybersecurity regulations of the DFS. Another is that they must respond to customer complaints on time and also ensure that they are resolved.

This news comes days after Wyoming approved a bill to offer financial services to Blockchain innovators. These are people that are said to have contributed immensely to the development of modern technology in the area. But then, some financial institutions were unable to offer their services to them due to strict regulations. This will no longer the case since specialized banks will be created to handle this.