New York approves Ripple Lab's application for bitcoin license

A Bitcoin (virtual currency) paper wallet with QR codes and a coin are seen in an illustration picture shot May 27, 2015. REUTERS/Benoit Tessier/Illustration/File Photo

WASHINGTON (Reuters) - New York state’s financial regulator on Monday approved a license for bitcoin company Ripple Labs Inc, allowing it to offer digital currency services in the state.

The New York State Department of Financial Services said the company had cleared a review of anti-money laundering, capitalization, consumer protection, and cyber-security standards.

“DFS is pleased to continue to foster the growth of the New York virtual currency marketplace,” Acting Department of Financial Services Superintendent Maria T. Vullo said in a statement.

Bitcoin is a Web-based “cryptocurrency” that enables users to move money around the world quickly and anonymously without the need for third-party verification. Despite being championed by some as the digital money of the future, it is often dismissed as a currency that is too volatile to invest in.

Ripple’s service and currency, known as XRP, is for financial institutions and companies, such as banks, that provide liquidity for foreign exchanges.

Last year, New York became the first U.S. state to issue extensive rules for virtual currency companies. The guidelines, aimed at consumer protection and prevention of money laundering, require companies to obtain what is known in the state as a “BitLicense.”

Ripple filed for the license under its corporate name, XRP II LLC, a venture backed by Andreessen Horowitz, Google Ventures and IDG Capital Partners.

Reporting By Patrick Rucker and Suzanne Barlyn; Editing by Alan Crosby