Square obtains NY State cryptocurrency license

https://www.reuters.com/article/us-cryptocurrencies-square/square-obtains-ny-state-cryptocurrency-license-idUSKBN1JE1U6

by petethomas • 8 years ago

196 64 8 years ago

tedmiston• 8 years ago

The Square Cash app has had this feature for a few months now. It looks like it just has not been available to residents of New York, Georgia, Hawaii, or Wyoming.

https://techcrunch.com/2017/11/14/square-cash-is-letting-som...

https://techcrunch.com/2018/01/31/square-cash-expands-bitcoi...

deltateam3• 8 years ago

Odd feeling when your state has the same restrictions as countries on the OFAC list.

microcolonel• 8 years ago

Sometimes it feels like NY will pass and keep almost any law, as long as it hurts somebody who has no powerful friends.

yebyen5• 8 years ago

Apparently according to TFA this is the ninth such license that was awarded? Wikipedia page needs an update, they still only list the first five:

https://en.wikipedia.org/wiki/BitLicense

(I was only aware of the one that I knew Coinbase held.)

otoburb• 8 years ago

Somebody just updated it[1], ironically from NY state.

[1] https://en.wikipedia.org/w/index.php?title=BitLicense&action...

yebyen5• 8 years ago

I wonder how Reuters got all the way up to nine!

With the Square approval, DFS has now approved nine firms for virtual currency charters or licenses, while denying those applications that did not meet DFS’s standards. DFS has also granted licenses to Xapo, Inc., Genesis Global Trading Inc., bitFlyer USA, Coinbase Inc., XRP II and Circle Internet Financial, and charters to Gemini Trust Company and Paxos (formerly itBit Trust Company).

from the Wiki citation [21]

https://www.dfs.ny.gov/about/press/pr1806181.htm

looks like two are charters, not sure how that's different than a full BitLicense.

asdsa5325• 8 years ago

It's a shame that Square is getting caught up in this scam. It makes me no longer want to do business with them.

deltateam3• 8 years ago

Square is a payment processor and all payment processors are presented with an opportunity to use existing blockchains as the rails for a cheaper money transmission system. Blockchain networks have the capability to be cheaper than the offerings of the SWIFT system, ACH and VISA networks, for the payment processor.

Given the state of the technology today, taking advantage of these cost savings in the most network-aligned way requires massive liquidity. Square creating a liquidity solution helps them and grants their customers something they want.

glitchc3• 8 years ago

I'm not buying the cheaper argument. Which part of transacting on the Bitcoin network is cheaper exactly? Mining is cost-intensive, and transaction fees are at least an order of magnitude higher than Visa. Equating SWIFT to Visa is also disingenuous as the former is meant for cross border settlements where the restrictions are regulatory (AML), not technology. Switching to Bitcoin doesn't mean Square or any other institution can simply ignore AML laws.

I see this mainly as a service they wish to provide to a segment of their customer. I also expect it to be a loss leader and shut down over time.

vorpalhex• 8 years ago

So instead of using ACH which uses a currency with a fairly stable value and has a resolution process, they should use the blockchain instead, hope there are no major security issues in the near future, and hope their transaction eventually settles?

Square creating a liquidity solution

How is putting transactions across the blockchain instead of ACH or Swift "more liquid"? I mean, I suppose if you want to evade taxes maybe, but I'm not clear how that actually helps the payment processor. Square doesn't benefit from "liquidity".

jMyles• 8 years ago

I understand that some people don't see value in blockchain tech, but boy, this is just naked hyperbole.

superkuh• 8 years ago

Yeah, they should avoid New York state and their scammy, rent-seeking, regulators as much as possible. The idea of a cryptocurrency license is absurd and an affront to the very concept.

arcticbull• 8 years ago

No totally, they should exclude the state with a 1.1 trillion dollar GDP, the 3rd highest in the United States and the same as the entirety of Mexico because they needed a license. Good point, I hadn't considered that.

glitchc3• 8 years ago

How are they going to handle this? Will they be holding coins a la an exchange or will they host multiple full nodes and post txes to the chain?

m3kw9• 8 years ago

I feel like these higher profile cryptocurrency projects are just still following thru because they’ve been approved at the peak of its hype and fully funded back then.

clarkmoody• 8 years ago

I think Jack Dorsey's interest in Bitcoin goes a little beyond the current hype cycle.

[1] https://www.ccn.com/i-hope-bitcoin-will-be-internets-native-...

DINKDINK7• 8 years ago

The ICO-scam mania is waining, systems that run those ICOs are cooling (Ethereum), but the need for a system of sound, programmable money remains. This is why Square is pursuing Bitcoin.

kartan• 8 years ago

the need for a system of sound, programmable money remains

I understand that the original goal was to have the value of the currency to be not controlled by a central bank.

Is there any other benefit to it? What does it mean that the currency needs to be "programmable" in this context?

ENGNR• 8 years ago

Ethereum is the robust base layer for a whole bunch of stuff. ICOs are an ok use case for Ethereum today, but when plasma is ready (months not years), the transaction capacity will explode and fees could go to zero within a plasma chain. There will surely be a huge increase of real useful applications, including in the payment space

I think Bitcoin might be useful for storing and holding wealth, whereas Ethereum is much more active protocol, for active communication and interaction

craigc3• 8 years ago

Your comment implies that the peak will never be surpassed. It is certainly possible you are right, but remember a lot of internet companies declined a lot after the dot com bubble burst, and a few rose from the ashes. It would be silly to not continue to pursue a new technology just because it is not as big as it was late last year.

benarent2• 8 years ago

One interesting product decision with Square Cash and Robinhood Crypto services is that customers can't transfer off as BTC ( to another exchange / hardware wallet) . When I asked Robinhood they said it was so customers didn't user BTC for illegal activity as they hadn't built out specific anti-money laundering measures.

dawhizkid• 8 years ago

I don't think that is true for Square Cash. I can withdraw to a different address off Square - I needed to verify by DL first though.

pcmonk• 8 years ago

That's correct, you can transfer off Cash app. However, you can't deposit BTC to your Cash app.

benarent2• 8 years ago

Yeah. I found it. https://squareup.com/help/us/en/article/6307 The menu is pretty hidden.

zitterbewegung• 8 years ago

I thought that the sentiment at Square was hostile to cryptocurrencies . They stopped accepting bitcoin and also patio11 was skeptical about cryptocurrencies but those views could have been his.

simonk• 8 years ago

patio11 works for Stripe not Square

paulie_a5• 8 years ago

They stopped accepting bitcoin for good reason, not hostility. Why would anyone ever want to pay in bitcoin with the massive transaction fees.

yebyen5• 8 years ago

It has gotten better (I actually am of the impression that the transaction volume has gone down, and that's largely to credit for the fact that fees are back down, perhaps because of Lightning and/or Segwit; but regardless of the reason why, there is nobody left who is paying $15-30 in fees for each BTC transaction on the chain today)

This great visualization[1] showed up on my feed yesterday, you can see that most of the BTC transactions' fees are being measured in single-digit USD cents again. It compares BTC to BCH, and you have to wait a while to see what's happening, but I think it's a fairly unbiased and basically informative view of how the two on-chain transaction scaling strategies actually work.

(Spoiler: the number of BTC transactions is still massively outpacing the number of BCH transactions, in case you didn't guess that.)

[1] https://bitcoinsubway.cash/

[edit: http_s_]

SilasX• 8 years ago

Wow, "BitLicense" cryptocurrency licenses (in NY) are thing now:

https://www.dfs.ny.gov/legal/regulations/bitlicense_reg_fram...

yebyen5• 8 years ago

I would never have become a Coinbase user except for all of the press when they got theirs, while I was living in NY.

Centralized exchanges are not really my thing, but legal compliance is pretty alright by me, and NY is a notoriously difficult regulatory climate. When I heard that Coinbase might be sending my information to the IRS, it was actually a relief.

(Given: I have managed to make not very much on crypto for someone who has been involved in the ecosystem for a while.)

TaylorGood• 8 years ago

There is a "crypto" documentary on Netflix which goes into detail about how this came to be. Spoiler: the sanctioning board have basically all left Gov't to consult privately on best practices to getting the license.

spunker540• 8 years ago

I think Square has a huge incentive for cryptocurrencies to catch on because almost all their payments and hardware incur credit card fees, licensing fees etc. Not to mention complex and outdated settling mechanisms.

BloodyHands• 8 years ago

New York State legalizes a scam

news at 11

Square obtains NY State cryptocurrency license

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