New York Regulators Grant Second BitLicense to Ripple

San Francisco startup Ripple has become the second blockchain firm to receive a BitLicense in New York.

AccessTimeIconJun 13, 2016 at 5:25 p.m. UTC
Updated Sep 11, 2021 at 12:19 p.m. UTC

Nearly nine months after the New York State Department of Financial Services (NYDFS) issued its first BitLicense, it has awarded a second to distributed ledger startup Ripple.

The BitLicense approval, effective today, allows the startup to sell and custody XRP, the native asset that powers its Ripple consensus ledger (RCL). While not a blockchain in the strict sense, the tool leverages a digital asset to account for payment information in a similar manner as other token-based blockchain systems such as Ethereum and bitcoin.

Founded in 2012, Ripple has succeeded in gaining more enterprise partners, however, due to its permissioning of network access. As such, in statements, Ripple stressed that the license would enable it to better serve business customers who wanted to tap into its technology to achieve cost savings in the field of cross-border payments.

Partners today have so far prioritized the ability to send traditional payment messages via the company’s technology without using the XRP token. Customers attest that this allows corresponding banks to bring brokers into the distributed ledger environment, creating a more robust network for money transfer.

But Ripple today suggested that its pitch to encourage customers to use XRP to further cut costs may now be more compelling.

CEO Chris Larsen said:

"With the BitLicense in hand, we look forward to working with our New York bank customers seeking to use XRP for liquidity and cost savings."

In statements, NYDFS superintendent for communications and strategy Richard Loconte said that the approval is a sign that, despite criticism earlier this year, the department is moving applications forward.

Further, Loconte forecasted that more updates could be forthcoming, telling CoinDesk that additional licenses are likely to be approved, and that more could be released this week.

Image via Dan Cawrey for CoinDesk


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