In spite of the many hits that it has taken in the past, a recent Bitcoin news item has brought in some respectability for the digital currency. Bitstamp, a Slovenian Bitcoin exchange, announced that it had received a license to operate as a payment institution. This makes it the first nationally licensed Bitcoin exchange in the whole world.
According to Bitcoin news, the company also claimed that this license allows the exchange to function in this capacity across the whole of the European Union. The CEO of Bitstamp Nejc Kondric is optimistic that other exchanges would soon follow suit. Bitstamp was registered in Luxembourg in the year 2015. According to Bitcoin news item that appeared lastmonth, the CEO of Pantera Capital, Dan Morehead, said that this license (using the passport program) would allow the exchange to operate across all the 28 countries comprising the EU. Pantera Capital deals in investments made using the Bitcoin currency. This Bitcoin news has been seen as one that would help the digital currency finally make its presence felt in the mainstream as an alternative to other fiat currencies that have been used up till now. This has been reinforced by the fact that Bitstamp has announced Euro-Bitcoin trading. Any consumer that resides in an EU country would be able to exchange Bitcoins for euros and vice versa.Some of the other exchanges that offer trading in euros and Bitcoins include Kraken and Coinbase.
According to Bitcoin news, Bitstamp started laying the foundation for obtaining the Luxembourg license for almost two years now. The work started immediately after the company was refused a license in the United Kingdom. They have continued to strengthen their levels of security and also implement procedures that would tighten their financial soundness and implementing and adhering to anti-money-laundering rules. The company is also ready to subject itself to annual audits. The company’s plans are to make Bitstamp a secure and reliable exchange that consumers could bank upon. It seems that a few Bitcoin companies in the US are also making inroads into the mainstream. Last year October saw Gemini, a Bitcoin exchange operated by the twinsCameron and Tyler Winklevoss, obtain permission to operate as a limited liability trust charter in the state of New York. Another exchange that was granted a similar charter a few months before was itBit. Around the same time, a new BitLicense was granted to Circle (another online wallet company) by the state. However, according to Jean Louis Schiltz, the attorney from Luxembourg who helped Bitstamp to secure the license said that this exchange was the first one of its kind to receive the license in EU.
Though the Bitcoin news regarding the granting of the charters equates to regulatory progress as far as the digital currency is concerned in the United States, it largely varies by the state. Coinbase, a popular and well-funded US exchange is not licensed to operate in all the 50 states. Most companies that use Bitcoins function with regular money transmitter licenses. New York is one state that is pushing ahead for more formal regulations that are specific to the Bitcoin as well as other digital currencies. Though such moves are generally expected to provide relief to the businesses and consumers who use the different services involving Bitcoins, the complete solution is still far away. These users have been looking for a way that would make spending and moving currencies across borders easier than it is now. This is more relevant for the developed nations as compared to the developing countries where moving money is much easier. When Bitcoins are used, it may perhaps mean sending money over the internet as easily as text or mails. However, the shutdown of Mt.Gox Bitcoin exchange in 2014 did reasonable harm to the reputation of the digital currency. This incident is also believed to have slowed down the speed of the appearance of regulations that would bring this currency into the mainstream.
Implications for Bitstamp
For Bitstamp, this license would help the company to create more banking partnerships. The company would also be a venue to provide liquidity for forex trades that list Bitcoin against the dollar or euro trading pairs. Bitcoin startups would attract more investments much like how Circle announced a partnership with Barclays. In the meanwhile, another Bitcoin news item of interest was that the Chamber of Digital Commerce in the US has joined hands with different blockchain organizations across the world to form the Global Blockchain Forum which would work towards shaping international blockchain policies.