Coinbase Launching First Regulated Bitcoin Exchange in US

21:32
26 Jan

Coinbase will become the first US licensed Bitcoin provider. According to a report from gizmodo.com, Coinbase is expected to start offering its services to US citizens today and will be approved in 24 different jurisdictions in the states.

The site will offer a place where users will be able to trade Bitcoins and monitor its ups and downs. However, getting a license to operate in the US is not easy (as demonstrated by a small number of poker sites operating on US soil), so in order to get this privilege Coinbase had to make sure certain criteria were met, especially site security.

To further understand how the company was able to achieve this breakthrough, we need to look ‘under the hub.’ For one, it is not a young, non-established venture looking to make a name for itself, but rather a company with a long history led by people knowledgeable in finance – bankers and investors.

Backed by a very respectable amount of $106 million from the New York Stock Exchange and other financial organizations, it was still a 5-month ordeal to get a license. However, the eventual victory was well worth the effort.

Company CEO Brian Armstrong and co-founder Fred Ehrsam came out with a well thought-out plan and were able to get the necessary approvals. Now that they have entered the market, the plan moving forward is to take 0.25% of the majority of transactions after an initial ‘grace’ period of two months.

To many, Coinbase offers something that the majority of Bitcoin exchanges lack – and that’s full legitimacy. Although they will initially only operate within approved jurisdictions, they have plans to expand to other US states and other countries around the world as soon as possible.

To have an organized exchange that has the backing of thoughtful venture capitalists and investors addresses one of the main problems with Bitcoin: its extreme volatility. Bitcoin has been sorely in need of something like this." Campbell R. Harvey, a Duke University finance professor for Wall Street Journal;
We’ve already written about the current atmosphere surrounding Bitcoin and how numerous scandals (Mt. Gox in particular) have had a detrimental impact on its value. If it is to survive, the cryptocurrency needs better security, regulation, and it ultimately has to become something potential customers are not afraid to use.
In that sense, Coinbase could mean a big step forward for Bitcoin and help it to finally become similar to other currencies. As the Duke professor explained, the cryptocurrency really needed something like this to happen and we will certainly keep an eye out to see how things will develop moving forward.

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