Coinbase Opens First U.S. Bitcoin Exchange with Top Financial Investors
Final preparations for the first licensed cryptocurrency exchange in the U.S. are underway, pushing bitcoin towards another notable milestone.
Started by Coinbase, the exchange aims to stabilize virtual currencies by offering legitimized trades with insurance. The company’s lineup of large investors includes the New York Stock Exchange, USAA, IDG Ventures, and DFJ Growth.
Lack of regulations and major security breaches caused bitcoin to fluctuate drastically in the past. With the highly anticipated exchange, the use of digital money may attract individuals who are hesitant about its performance in the financial market.
Campbell R. Harvey, a Duke University finance professor, said, “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.”
Coinbase employees have been working overtime to secure state licensing from regulators around the country. So far, the startup has gained approval from densely populated states where bitcoin thrives, such as New York and California.
The exchange is currently limited to users based in the U.S. who are residing in approved states. However, this may change in the future, as the company preps for overseas transactions.
When asked about expansion plans, Chief Executive Brian Armstrong highlighted, “Our goal is to become the world’s largest exchange.”
Coinbase offers its digital wallet services to over 19 countries worldwide. If all goes well, the company may extend its core product to an additional 11 countries by the end of the year.
Other bitcoin exchanges that are in the works include Gemini, which was started by the Winkelvoss brothers.
“A growing number of US investors, traders, financial institutions and businesses wanted to get involved with bitcoin directly, but had no options other than to trade overseas or sit on the sidelines,” mentioned Cameron Winklevoss.