Signature Bank Receives NYDFS Approval For Blockchain Payments Platform

Blockchain, News, Regulation | December 5, 2018 By:

Signature Bank, a full-service commercial bank, has received regulatory approval from the New York State Department of Financial Services (NYDFS) to offer an ethereum blockchain-based digital payments platform.

Signature Bank offers business and personal banking products and services. Its specialty finance subsidiary, Signature Financial, provides equipment finance and leasing. Signature Securities Group Corporation, a wholly owned bank subsidiary, is a licensed broker-dealer and investment adviser offering investment, brokerage, asset management, and insurance products and services. The bank has 30 private client offices throughout the New York metropolitan area, including those in Manhattan, Brooklyn, Westchester, Long Island, Queens, the Bronx, Staten Island and Connecticut.

Signature Bank announced that it has been authorized by the NYFDS to launch Signet, a blockchain platform designed to enable real-time payments for its commercial clients. The platform will allow clients to make payments in US dollars 24 hours a day, seven days a week, 365 days a year.

“Transactions made on the Signet Platform settle in real time, are safe and secure, incur no transaction fees, and require a minimum account balance of $250,000,” the bank said. “Typically, in the case of real-time payments, funds are transferred between two different institutions. With Signet, funds are transferred in real-time between commercial clients of Signature Bank, eliminating any dependence on a third party.”

Joseph J. DePaolo, President and Chief Executive Officer at Signature Bank, said that the ability to transmit funds between approved, fully vetted commercial clients of the bank at all times is very valuable, especially in light of the increasing speed and frequency at which they conduct their business.

“As we have been stating, Signature Bank has made a commitment to invest in its technology infrastructure, and the Signet Platform is indicative of this investment along with the implementation of new systems for loan operations, credit approvals and foreign exchange,” DePaolo said. “We believe our new Signet program will further differentiate Signature Bank and arm our commercial clients with more of the types of tools and capabilities they need to successfully operate their businesses in our fast-changing, technology-based economy.”

The NYDFS said that the approval is based on stringent requirements including to implement, monitor and update effective risk-based controls and appropriate BSA/AML and OFAC controls to prevent money laundering or terrorist financing, as well as comply with NYDFS’ transaction monitoring and cybersecurity regulations.

“DFS is pleased to strengthen and foster regulated innovation in New York’s burgeoning financial technology sector, specifically within our state-chartered banking system,” said Department of Financial Services Superintendent Maria T. Vullo. “New York continues to support and help advance innovation through sound state regulation and with products such as Signet, which provide lower-cost ways for businesses to efficiently make payments.”

DePaolo said that it is gratifying to have the support of Superintendent Vullo and the Department of Financial Services, adding that through regulated innovation, they were able to turn their vision into a reality.

“It is clear the Superintendent and Department of Financial Services have thoroughly researched the financial technology arena and understand how it impacts the future of financial services,” DePaolo said. “We look forward to working closely with their team to continue to transform digitally.”