Bittrex recently announced that they entered into an agreement to allow users to trade using US Dollars. They will launch support later today, with pairings for USD, Tether and TrueUSD.
This feature is being currently rolled out to corporate consumers for the time being due to regulatory concerns. The feature will be available for corporate customers in Washington, New York, California and Montana.
The bank that will manage the USD side of Bittrex’s operations is Signature Bank, based out of New York which according to various reports does $37.3 million in revenue. They are one of the other financial firms that Bittrex will choose to hold dollar-denominated funds.
Bittrex CEO Bill Shihara said that the move was indicative of banks being able to trust crypto, and was not just about Bittrex. He said:
“It’s been a long path…And I think it’s really showing that crypto is turning the corner in terms of mainstream acceptance.”
The reluctance of big institutional names to move into the crypto market might be due to the lack of a regulatory framework, which comes with its own uncertainties. Government regulations on money laundering such as AML and customer information such as KYC are being enforced on crypto exchanges, as they associated with banks. The criminal connotations of dealing with Bitcoin also contribute to the hesitance of institutional investors.
This results in many exchanges being crypto-to-crypto, leaving customers to find complex workarounds to convert their crypto into fiat. Coinbase has found their banking partners in Cross River Bank, Metropolitan Bank and Silvergate Bank in the United States. They have also managed to obtain a Barclays PLC bank account in the UK.
Bitfinex is supported in the banking sector by Puerto Rican bank Noble Bank International after its falling out with Wells Fargo.
Shihara stated that the process was rigorous, saying:
“They really do look and pore through the entire business. 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.”
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