Filed Under:  U.S. & World

Coinbase Opens the First Regulated Bitcoin Exchange in the US

Contributed by on January 26, 2015 at 12:27 pm

BitcoinsJust one week after Coinbase scored $75 million in funding, the bitcoin payment firm will open the first regulated US bitcoin exchange on Monday. The company’s exchange product will be available in 24 states.

Coinbase Exchange will provide a platform for both institutions and individuals to trade bitcoin and monitor its pricing in real-time with greater security. Until now, bitcoin was traded virtually and typically overseas. While the cryptocurrency still isn’t backed by the government, Coinbase’s regulated exchange will go a long way in helping legitimize bitcoin and provide assurance to consumers that their investment won’t disappear.

Last week, USAA, Union Square Ventures and the New York Stock Exchange officially became investors in Coinbase. The company announced that it received regulatory approval in about half of all states, including California and New York.

While the exchange is a first for Coinbase in the United States, the company already offers exchange services in 19 other countries. According to Coinbase, it took approximately five months to acquire approval and licenses. As of Monday, only customers located in the 24 approved states can use the exchange, but the company has plans to gain approval in additional states.

Coinbase will receive a 0.25% commission from all exchanges made through its service. To get consumers to start using the exchange, the company is offering two months of free trading. Over 38,000 merchants process bitcoin payments via the company’s platform, and Coinbase has 2.1 million consumer wallets.

Volume at launch was 1,897 BTC, which is well below Bitfinex’s BTC. Currently, the exchange leader trades at over 1.7 million BTC per day.

News of the exchange has spiked bitcoin’s value to $280. Just three days ago, bitcoin was valued at $230. In 2014, several major retailers, including Dell, Overstock and Square, also partnered with Coinbase to start offering bitcoin payments. The introduction of this new licensed and regulated exchange may just mean a positive future for the cryptocurrency.