The Department of Financial Services of New York (NYDFS) has endorsed a blockchain-based digital platform by a local bank.
An official NYDFS press release announced this development.
NYDFS superintendent Maria T. Vullo remarked that the department sanctioned New York-based Signature Bank to offer its digital payment platform Signet in the state.
The system makes use of blockchain technology to let bank clients “transfer ‘Signets’ to make payments with no transaction fees, at any time of the day, year-round.”
The system supposedly allows funds “to be transferred in real-time between two commercial clients of Signature Bank, eliminating any dependence on a third party.” Signet has been subject to a “comprehensive and rigorous review” and needs to comply with “significant regulatory conditions.”
Namely, the “approval includes required conditions to ensure […] compliance with New York’s strong standards and regulations regarding anti-money laundering (AML), anti-fraud, and consumer protection measures.”
In addition, Signet balances are entitled for coverage by the Federal Deposit Insurance Corporation (FDIC), of which Signature Bank is a member. This corporation countersigns most private U.S. bank deposits “up to the legal insurable amounts defined.”
Vullo said that the department is “pleased to strengthen and foster regulated innovation […] specifically within our state-chartered banking system.”
The official expressed:
“New York continues to support and help advance innovation through sound state regulation and with products such as Signet…”
The press release noted that Signature bank is a “full-service commercial bank with 30 private client offices throughout the New York metropolitan area,” which has $45.87 billion in assets.
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