Square To Start Selling Bitcoin Following NY BitLicense Approval
Square, a financial services provider, will now start selling Bitcoin in the state of New York after it received a go-ahead.
The New York Department of Financial Services (NYDFS) granted a BitLicense to the digital payment firm on Monday, June 18.
Until then, Square had held a money-transmitter license issued by the DFS. It meant it could not allow its users in the state of New York to trade in Bitcoin.
However, following the approval, Square is now able to sell Bitcoin (BTC) in the state via its Cash App platform.
The NYDFS through its Financial Services Superintendent Maria T. Vullo said the regulatory body was pleased to have approved Square’s application.
In a press release, Superintendent Vullo said that:
“DFS is pleased to approve Square’s application and welcomes them to New York’s expanding and well-regulated virtual currency market.”
New York has a tight regulatory framework when it comes to dealing with virtual currencies. Although it has issued licenses to about nine firms, its BitLicense requirement has pushed away many others.
The NYDFS has so far granted operating licenses to crypto exchanges Coinbase, Xapo, bitFlyer USA, and Circle Internet Financial.
Others to get the nod include digital trading firm Genesis Global Trading and XRP II. It has also granted charters to the Winklevoss’ Gemini Trust Company as well as to Paxos.
Square applied for the license in March. The Cash App tool provides users with access to a wide range of financial services. This includes the option to buy and sell Bitcoin.
Commenting on the approval, Cash App’s Brian Grassadonia said:
“We are thrilled to now provide New Yorkers with Cash App’s quick and simple way to buy and sell bitcoin. Square and the New York State DFS share a vision of empowering people with greater access to the financial system and today’s news is an important step in realizing that goal.”
The founder and CEO of Square Jack Dorsey confirmed the development, tweeting to his followers that it was now possible to buy and sell BTC instantly from the app.
Apart from buying and selling the top cryptocurrency, Cash App also allows users to send funds to an external wallet.
Customers can access the app’s user-friendly UI to easily transfer BTC to another wallet.
However, it doesn’t have the functionality to allow its users to receive coins from third-party wallets.
What it means is that a user can send bitcoin to another wallet, but won’t be able to receive them from other Cash App users.
Is it cheap?
It’s easy, but it may not be cheap.
Cash doesn’t charge additional percentages on top of the BTC prices. However, the prices are usually a bit high.
According to the platform, the price is arrived at by calculating quoted mid-market prices that combine BTC prices across major exchanges.
The mid-market value is inclusive of “a margin or spread.” A margin is basically the difference between the current selling price and current buying price of Bitcoin.
It’s upon this price that Square calculates its bids before offering to buyers. The platform gives an explanation on its getting started page, saying that:
“When you buy Bitcoin from Square, the margin may differ from when you sell Bitcoin to Square. The price and margin may also differ from what you see available on other marketplaces.”
It may, therefore, be slightly higher than on a regular exchange.
The option for users to easily be able to buy and sell bitcoin is New York via Cash App won’t just be great for traders only. It opens up other possibilities too.
Already Square’s hardware makes it easy for sellers to accept payments via credit card and other contactless payment methods.
In addition, the company also provides Point of Sale (PoS) services.
The implication is that this could be an opening for merchants in NY using the platform to also consider accepting Bitcoin payments.