Welcome to BitBeat, the latest in cryptocurrency news and analysis, written by Paul Vigna and Michael J. Casey.

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Crossing Our Desk:

- ItBit, a New York-based digital-currency exchange, opened its doors on Thursday to U.S. customers as a trust company. The 18-month old startup announced that it has received a trust company charter from  the New York State Department of Financial Services that will allow it to operate in all 50 states as a fully regulated financial-services entity.

That was only one of the things the company announced. ItBit also closed on a $25 million funding round, bringing its total capital raising to $32 million, and named several notable people to its board of directors, including former FDIC chairman Sheila Bair and former U.S. Senator Bill Bradley.

Taken collectively, the moves signal the start-up’s intentions to be a mainstream commercial business, and a mainstream option for investors in the capital markets. It’s also the latest in a series of moves that are meshing together the worlds of bitcoin and Wall Street.

“Our focus has been to create an institutional-grade exchange,” Charles Cascarilla, itBit’s co-founder and CEO, told MoneyBeat, to differentiate itself from the unregulated, Wild West kinds of bitcoin companies that have scared off investors and the Street. ItBit was founded in Singapore, another banking capital, but moved to New York last year.The firm started the application process for the trust charter 15 months ago, before it even moved its offices to New York last July.

Going the trust route is a novel play. Most start-ups go through the process of getting money-transmitter licenses, which is a state-by-state process. With the trust charter, Mr. Cascarilla said, “you’re stepping into a much higher standard of oversight and requirements, which reassures the traditional system.” That’s key, he said, because the firm’s goal is to attract commercial institutions and the professional investing class. ”We don’t want to be the best bitcoin company,” he said, “we want to be the best bitcoin company in financial services.”

It’s also a notable advance for the bitcoin capital market. The number of trading platforms and products are increasing, and the opportunities for trading are far wider than they were just two years ago, when the majority of bitcoin trading was going through Mt. Gox’s rickety structure. Today there are a number of exchanges around the globe, and investors can buy swaps and derivatives, and make leveraged bets; there is one bitcoin ETF on the market, from Barry Silbert’s Bitcoin Investment Trust, with another coming soon from Tyler and Cameron Winklevoss – who are also running their own exchange, called Gemini.

All of this is building a base for bitcoin trading that positions the nascent market – and the promulgators of these products hope potential customers will see it this way – as a mainstream investment, something your advisor in the family office might recommend. That’s the plan, at least. What will be interesting now will be to watch and see if all these moves convince investors that bitcoin and digital currencies are really past their Wild West phase.

The trust company charter allows itBit to begin taking U.S. deposits that will be fully insured and fully compliant with standard regulations. In essence, itBit will be acting as any other trust company, with the only difference being that its focus is on digital currencies. It’s an approach that is different from other bitcoin startups; itBit will be acting as a regulated fiduciary, responsible for holding its clients assets under the same rules that govern State Street and Rockefeller Trust Co. Mr. Cascarilla was careful to point out, though, that it won’t be acting as a full-bore bank. “We won’t be making car loans.”

The company also announced an expansion of its board of directors to five, with three new members: Ms. Bair, Sen. Bradley, and Robert Herz, a former chairman of the Financial Accounting Standards Board and a senior partner at PricewaterhouseCoopers. The Series A fund-raising round included previous investors RRE Ventures, Liberty City Ventures and Jay W. Jordan II; among the new investors are Raptor Capital Management chairman James Pallotta.

Sen. Bradley was well known among his New Jersey constituents for going down the shore every summer and walking on the beach to meet and spend time with the regular folk. We wonder if he’ll do the same this summer, maybe handing out bitcoin as well as shaking hands. (Paul Vigna)