According to recent reports, tech company Square has been issued a New York State “BitLicense”. This license allows them to deal in cryptocurrency buying and selling in New York State, a location with some of the toughest regulations in the USA. To date, they are only the ninth company to receive this credential.
Square Loves Bitcoin
Square is a tech company that launched its own competitor to PayPal and other mobile fiat currency systems called Cash App. Not long ago, they included functionality that allowed its users to buy and sell Bitcoin as well as send or receive it within the app. The features went live in late 2017 for some users and has been expanding to more users over time.
Instead of charging a fee for allowing users to buy or sell Bitcoin, instead Square makes its money through what’s known as a bid-ask spread. Basically speaking, when the Cash App sells Bitcoin to you at a price of X, the amount of money they paid for it would instead be something like X minus Y percent, where Y is their spread. This is different from competitors like Coinbase which charges not only both a flat fee and a percentage in most cases, but also a bid-ask spread. So for some buyers, the Cash App could be the most affordable option for buying and selling bitcoin.
Escape from New York
One critical issue the company has been facing is that they have been forced to restrict any New York State based customers from accessing these features. This is because New York State, unlike other more crypto-friendly states, have enacted tight regulations on cryptocurrencies and those who deal in them. In order to be allowed to transact in cryptocurrencies, a business needs to qualify for and be granted the so-called BitLicense.
Qualifying for the license includes verifying that your company will comply with a litany of complex regulations including full compliance with KYC and AML standards. In other words, no anonymous bitcoin trading is allowed.
Jack and Bitcoin, Hand-in-Hand
Square is owned and operated by the CEO of Twitter, Jack Dorsey.
Dorsey has been an outspoken Bitcoin bull. He recently stated that he believes Bitcoin will become the currency of choice for global transactions within the next 10 years.
Many reporters seemed to misquote him and instead stated that Dorsey believed Bitcoin would replace all forms of currency within just 10 years. Instead, it is most likely that Dorsey meant that Bitcoin would become the currency of choice when dealing with cross-border transactions. It could also become the currency of choice for companies that do international trade, although this has yet to be seen in real life.
Specifically, Dorsey said:
“The world ultimately will have a single currency, the internet will have a single currency. I personally believe that it will be bitcoin. [It’d take] probably over ten years, but it could go faster.”
This does not mean the entire world will only have one currency in it.
Getting Closer to Adoption
One important step that needs to take place before cryptocurrency adoption can spread more is that it needs to be easy to use and accessible to the general public. Easy-to-use apps like the Square Cash App are excellent examples of exactly what the cryptocurrency space needs in order to grow. It needs easy-to-use apps and websites that give no-nonsense features to as many people as possible.
Once this is in place, accepting cryptocurrencies will be a lot more attractive to businesses and individuals.