Bakkt Receives New York BitLicense, Enabling Crypto Services in the State

Bakkt Receives New York BitLicense, Enabling Crypto Services in the State

Bakkt, the cryptocurrency arm of Intercontinental Exchange (ICE), has received the much-sought-after BitLicense from the New York Department of Financial Services (DFS), enabling it to provide a range of digital currency services in the state. This marks an important milestone for the company, as it becomes the 29th firm to be granted a BitLicense, a regulatory framework designed for virtual currency businesses operating in New York.

What is a BitLicense?

The BitLicense is a regulatory license issued by New York’s DFS to businesses operating in the state and dealing with virtual currencies. Introduced in 2015, the license was established to ensure that cryptocurrency businesses meet stringent financial, security, and consumer protection standards. Securing a BitLicense is known to be a difficult process, with firms required to fulfill numerous requirements, including a significant financial cost that can exceed $100,000. To date, only 29 companies have successfully obtained the license, reflecting its challenging approval process and the New York regulators’ careful approach to crypto oversight.

Bakkt’s Achievement and Growth

Bakkt, established in 2018, has rapidly grown into one of the most recognized names in the cryptocurrency space. The company began by offering physically-settled crypto derivatives, but its reach has expanded significantly. With the approval of the BitLicense, Bakkt is now able to offer a wider range of services in New York, including crypto custody and payments. The BitLicense approval is considered a “major milestone” by Bakkt’s CEO Gavin Michael, who emphasized that it would help realize the company’s vision of making digital assets accessible to everyone.

Milestones for Bakkt

In 2019, Bakkt received approval from the DFS for its institutional Bitcoin custody services, allowing the company to facilitate the safe storage of Bitcoin linked to Bitcoin futures contracts. This earlier approval laid the groundwork for Bakkt’s future success and paved the way for its growth in the institutional market.

In addition to its custody services, Bakkt has been expanding its operations and services, including the launch of a crypto payments app designed to allow consumers to use Bitcoin and other digital assets for purchases. Bakkt has also partnered with Starbucks, enabling customers to convert Bitcoin into cash and use it to pay for coffee. While this was not a direct Bitcoin transaction, it marked a key step towards making crypto payments more mainstream.

Bakkt’s Potential as a Public Company

The timing of Bakkt’s BitLicense approval comes as the company prepares for a public listing. Bakkt has agreed to merge with a special purpose acquisition company (SPAC), which could lead to a $2 billion valuation for the firm. This move reflects Bakkt’s growing presence in the cryptocurrency space and its plans to expand further into consumer and institutional markets.

The Growing Role of Digital Assets in New York

New York continues to play a central role in shaping the future of cryptocurrency and digital assets. According to Linda Lacewell, Superintendent of the New York DFS, granting the BitLicense helps offer more crypto options to citizens as the state works to recover and rebuild. The approval of companies like Bakkt helps further solidify New York as a key hub for the cryptocurrency industry.

Conclusion

Bakkt’s receipt of the BitLicense marks a significant achievement in the firm’s growth and ability to offer a wider range of services in New York. As the company continues to expand its product offerings and prepares to go public, its role in the cryptocurrency ecosystem is set to become even more influential. With its custody services, crypto payments app, and future ambitions, Bakkt is well-positioned to capitalize on the growing demand for digital asset solutions.

To learn more about the innovative startups shaping the future of the crypto industry, explore our article on latest news, where we delve into the most promising ventures and their potential to disrupt traditional industries.