New York and London are battling to be the home of FinTech REUTERS/Mark Blinch New York is doing its best to become the home of bitcoin, launching the first fully regulated national bitcoin exchange in the US.

itBit has become the first Government approved digital currency exchange in the US, after regulators gave the New York based start-up Trust status.

San Francisco start-up Coinbase earlier this year launched an exchange platform regulated in 23 states but itBit is the first with a national remit to operate.

Regulation through the New York State Department of Financial Services means the start-up must meet the same regulatory requirements as banks and the company hopes this will help attract institutional investors to bitcoin.

CEO and co-founder Charles Cascarilla said: “Our mission at itBit has always been to create a trusted, institutional-grade exchange and regulatory compliance is an important pillar of that mission."

Institutions have up until now avoided bitcoin, seeing it as too much of a financial wild west due to the collapse of high profile exchange MtGox and digital heists at other bitcoin business like Bitstamp.

The US beating the UK to the first regulated exchange might seem like a blow for London. The Government said in a white paper earlier this year that it wants digital currency businesses to "flourish" here and has been vocal in support for FinTech.

Tom Robinson, head of the UK Digital Currency Association doesn't think it will hurt London in the long run though. He told Business Insider: "While London has not regulated the sector to date, New York is establishing considerable regulatory barriers to entry.

"It's still too early to know which approach will be most successful, but heavy regulation is likely to stifle innovation and the environment in London should make it more attractive to startups that don't have millions of dollars to spend on compliance."

Robinson has been working closely with The Treasury and regulator the Financial Conduct Authority on a drawing up an appropriate regulatory framework for bitcoin and digital currency businesses.

But while London may be a light touch on regulation compared to the US, the biggest bitcoin exchange in the world is in China, followed by four in the US. London needs to make sure it doesn't miss out.

Guy Levin, head of the UK tech pressure group the Coalition for Digital Economy, told Business Insider: "We need to make sure that the UK continues to lead the world on FinTech, including digital currencies. It's great that George Osborne has previously shown his support for the sector, and we hope the new government will keep up the momentum."