Bitcoin Exchange itBit Reveals Details About Its ‘Secret’ Bankchain Project

ItBit, a global bitcoin exchange, reveals details of its exclusive Bankchain project, a private shared ledger system for banks.

Photo: ItBit

Photo: ItBit

ItBit, a well-known bitcoin exchange providing a reliable trading platform for institutional and retail investors, opened up about its secret Bankchain project, a private shared ledger system for banks and financial services firms.

ItBit is a global bitcoin exchange offering institutional and retail investors a powerful platform to buy and sell bitcoin. The company has taken a uniquely rigorous approach to regulatory compliance by establishing the itBit Trust Company, overseen by the New York State Department of Financial Services. ItBit is the first regulated bitcoin exchange able to accept customers across the United States.

Not long ago the company was authorized by the New York State Department of Financial Services. It got the charter and status of banklike company after almost a year of attempts to create a procedure of virtual currencies control. Recently, Ed Giorgio, 30, a veteran of the US National Security Agency, has joined the board of advisors at itBit.

As for the mysterious Bankchain project, it’s known just that itBit leveraged its “very deep contacts” on Wall Street, as well as its rigorous approach to regulatory compliance, goldplated by the itBit Trust Company, which is overseen by the New York State Department of Financial Services, reads IBTimes.

“Financial services firms cannot use the [bitcoin] blockchain and that is primarily because of the validation protocol, meaning that a company like JP Morgan for example, wouldn’t be able to allow new risk into current processes by having unknown parties clearing their transactions for them or validating their transactions over the blockchain and as a result there’s the need for permissioned ledgers,” said Steve Wager, itBit’s senior vice president of opertions, to IBTimes.

So, in a nutshell, itBit’s exclusive project is a fully permissioned distributed ledger system with a governance committee and a native itBit token.

“We also believe that the tokenisation aspect of bitcoin has some value components which cause problems for clearing and settlement platforms and as a result we developed our ItBit native token which will be valueless and unlimited,” added Mr Wager.

Still, the protocol supporting bank chain will be open-source as far as Bankchain participants are concerned, but it won’t be made public.

“People who actually sign up to use Bankchain, they will be able to view and test the code. It won’t be made public per se but it will be made available to members.”

Wager also noted that the target of itBit’s project is such large custodian banks  as Bank of New York Mellon, JP Morgan Chase, State Street and Citigroup.

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