Bakkt – the cryptocurrency startup launched by New York Stock Exchange (NYSE) owner Intercontinental Exchange – just yanked the lid off the full range of its blockchain ambitions.
The firm announced today that it has acquired Digital Asset Custody Company (DACC) as part of its efforts to gain regulatory approval for its crypto products.
Reportedly, Bakkt is less concerned with merely building a Bitcoin exchange than they are with offering institutional custody and payment platform services, all of which still requires regulatory approval.
Bakkt Acquires Crypto Custodian DACC
The company recently announced its application for a BitLicense, and it is also pushing to become a trust company in New York. The company’s efforts have been repeatedly stalled by regulatory delays, despite positive news around its partnerships with Starbucks, Microsoft, and others.
Coinbase previously acquired a trust charter with the New York Department of Financial Services. Becoming a trust can be a faster process than becoming a BitLicense recipient, which can take several years. Bakkt says in a new blog post that it’s applied for a charter, and recently we reported that they’re also seeking a BitLicense.
Bakkt wants to offer Bitcoin futures contracts that pay out in cryptocurrency, which would set them apart from other Bitcoin futures offerings. Bakkt has several other ambitious projects in mind, but it must get through several layers of red tape before it finally launches.
Adam White wrote in Bakkt’s blog today:
“To provide regulated custody, we have filed with the New York Department of Financial Services for approval to become a trust company and in this capacity serve as a Qualified Custodian for digital assets. […] It is with that same commitment to setting a new standard for securely storing digital assets that we’re excited to announce that we have acquired Digital Asset Custody Company (DACC). DACC shares our security-first mindset and brings extensive experience offering secure, scalable custody solutions to institutional clients. The team’s experience integrating multiple blockchains and operating cutting-edge consensus mechanisms is a valuable addition to our team and future product line.”
Bakkt CEO Kelly Loeffler told Fortune:
“From the ground up what ICE has been building for two years is the safest version of a custody solution for digital assets.”
Custody: The Key to Mass Bitcoin Adoption?
Bakkt and Coinbase have both claimed that offering secure, modern custodial solutions for cryptocurrency will encourage institutional investors to expand their portfolios to include the speculative asset class. Thus far, Coinbase and Circle’s offerings have yet to make a significant dent in the overall market.
Fidelity, a traditional assets management company, also nears completion of its custodial solution. A range of options doesn’t necessarily equate to investor interest, but their availability may play a vital role during any future bull run. Institutional investors will, at a minimum, have several popular options to choose from if they consider getting into the market, opportunities that didn’t exist in previous times.
Bakkt’s current push is three-pronged:
- They’ve acquired a company already engaged in playing custodian to digital assets.
- They’ve applied for a BitLicense.
- They’re working to become a registered trust.
There are other avenues they might still pursue, such as operating without New York as an available market at first. What is clear is that the company is anxious to get into the game, and the recent bull market activity is probably not far from their mind.