Bittrex, a Seattle-based cryptocurrency exchange, has launched support for fiat currency. A deal with New York’s Signature Bank will allow approved corporate clients to buy virtual tokens using USD, the exchange announced on its official Twitter.
The exchange, which currently trades around 200 cryptocurrencies, will initially offer USD pairs with bitcoin (Bitcoin), Tether and TrueUSD. The innovation will first extend to corporate clients from four states (Washington, California, New York and Montana), followed by all remaining customers as the company rolls out additional phases.
Why it is important
- This step signifies that banks can trust cryptocurrency companies in general - not just Bittrex. However, there is still a long way until cryptocurrencies become mainstream and receive general recognition.
- The unwillingness of institutional investors to enter the cryptocurrency market can be explained by the lack of a regulatory framework - large financial institutions have avoided associating with an industry that many still associate with criminal activity.
Financial watchdogs around the world are currently demanding that crypto exchanges comply with regulations on money laundering and user verification. In this sense, partnering with banks increases the level of investor confidence in crypto platforms.
“It’s been a long path,” Bittrex Chief Executive Officer Bill Shihara told Bloomberg. “It’s not just about banks being able to trust Bittrex. It’s about banks being able to trust crypto in general. And I think it’s really showing that crypto is turning the corner in terms of mainstream acceptance.”
“They really do look and pore through the entire business,” Shihara continued.“They want to make sure that we’ve got robust AML/KYC processes, that we’ve got the right controls on our finances. They do background checks and everything. They really look at our business soup to nuts.”
Many institutional firms are slowly approaching the digital currency market, and vice versa. Coinbase, for instance, is currently in talks with the US government about the possible acquisition of a banking license.
By Nadya Astam