The bitcoin payment and web wallet startup Coinbase will launch the first US based licensed bitcoin exchange on Monday.
Coinbase, which recently received more than $75 million in funding, has typically acted as a brokerage service for bitcoin users. It also runs its own processing service which allows merchants to accept bitcoin payments.
However, the San Francisco based company now wants to be able to offer the bitcoin industry “greater security,” with its main goal to “become the world’s largest exchange,” Coinbase chief executive Brian Armstrong told the Wall Street Journal.
The move, which many bitcoin users have said is long overdue, is likely to be seen as a big boost for the bitcoin industry and could not only help to increase trust amongst users but also help bring some much needed stability to the online currency, the price of which has fluctuated wildly over the past 12 months.
Coinbase is also said to have the backing of the New York Stock Exchange, as well as a number of leading banks and venture capitalists.
The new licensed bitcoin exchange will at first be available to US based customers in a selected number of states before being available throughout the United Stated by the end of the year. The company also hopes to service the international bitcoin market in the future.
Coinbase has said it will not charge any fees for the first two months. It is expected to charge a transaction fee of 0.25% thereafter.
Supporters of bitcoin have said the digital currency has the potential to revolutionise all levels of commerce. However, the service has remained largely unregulated which has put many people off investing.
There have also been problems with regards to security after millions of dollars of bitcoin suddenly disappeared from the now defunct Mt. Gox bitcoin exchange – another incident which didn’t exactly fill investors with confidence.
Coinbase, as well as investors in bitcoin will hope that a fully regulated and secure US exchange that has the backing of major financial institutions will help to attract more customers and bring the digital currency into the mainstream.
The announcement from Coinbase comes a few days after the Winklevoss twins, who famously tried to sue Mark Zuckerberg over claims that he stole their idea when creating Facebook, also revealed plans to start their own NASDAQ style bitcoin exchange.
Jonathan is our Google Nexus and Android enthusiast. He is also fanatical about football which makes it all the more strange that he should support Stockport County. In addition to writing about tech, Jonathan has a passion for fitness and nutrition and has previously written for one the UK’s leading watch and horology websites.