Category Archives: Bitpay

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Coinbase Looks to Acquire Banking Licenses

Coinbase is currently looking into the processes involved in acquiring banking licenses. The Wall Street Journal reports that an undisclosed source revealed that the exchange engaged in conversations with members of the US Office of the Comptroller of the Currency in earlier this year:

“Coinbase Inc and another cryptocurrency firm talked to US regulators about the possibility of obtaining banking licenses, a move that would allow the startups to broaden the types of products they offer.”

Additional Coinbase services

Coinbase has been expanding its services this year to become more than just an exchange. Its commerce API or its “PayPal-like service”, was released in February. Merchants could quickly implement cryptocurrencies as a payment method supporting BitcoinBitcoin CashEthereum, and Litecoin. The platform adds a “PayPal-like” button to e-commerce sites allowing streamlined payments straight to the vendor’s wallet.

Coinbase isn’t the only company to offer these types of services, with BitPay also letting customers pay in Bitcoin and Bitcoin Cash. With the volatility within the cryptocurrency market this year it may take more to encourage merchants to adopt this additional payment method.

Coinbase announced this month that it would be releasing its Coinbase Custody platform. The new product could entice institutional investors, it went on to explain: “The cryptocurrency market is maturing rapidly as more sophisticated institutional participants enter the space. In fact, in the past few months over 100 hedge funds were created that exclusively invest in and trade cryptocurrency. Some of the world’s largest financial institutions have also recently announced their plans to begin trading cryptocurrency.”

Coinbase Custody is a storage service for a minimum of USD 10 million in crypto. Financial institutions will be expected to pay USD 100,000 as a set-up fee and an additional monthly premium dependant on holdings. Coinbase claimed: “We have leveraged our experience safely storing more than $20 billion of cryptocurrency to create Coinbase Custody, the most secure crypto storage solution available.”

Industry issues

Coinbase believes its recent progress will accelerate the world’s adoption of cryptocurrency by bringing new capital and greater awareness to the industry.

The volatility of Bitcoin still stands to be an issue and has led to merchants withdrawing the payment option. This was one of the main reasons for Steam halting Bitcoin payments at the end of 2017. The rise of crypto-related crime is enough to deter investors in the interim.

As much as 30,000 people who have fallen victim to Ethereum-related theft, suffering an average loss of USD 7,500 each, according to Chainalysis. Exchanges have been targeted in large-scale hacks with Coincheck losing USD 550 million worth of NEM cryptocurrency (XEM) in January and Coinsecure losing USD 3.5 million in Bitcoin (BTC). With legislation and regulation becoming a hot topic among unions and governments, 2018 is set to be an interesting year for cryptocurrencies.

Coinbases profitability values the company at around USD 8 billion. The growth and reinvestment into new ventures such as the banking industry shows Coinbase’s faith in the future of cryptocurrencies.

However, not everyone believes that the company is heading in the right direction. Reddit user Bitcoin Yoda explains how Coinbase Commerce is moving in a different direction to Satoshi’s vision: “A purely peer-to-peer version of electronic cash would allow online payments to be sent directly from one party to another without going through a financial institution. Any intermediary between your BTC payment and the merchant is violating the definition of Bitcoin and your privacy.”

Is Coinbase’s pursuit of becoming a bank turning its back on the ideologies behind crypto?

 

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Seminole County Tax Collector Starts Accepting Crypto Payments

The Seminole County, Florida tax collector office headed by Joel Greenberg announced today that they would begin accepting cryptocurrency payments for their services. Specifically, they will be accepting Bitcoin and Bitcoin Cash through BitPay. This is a major milestone for BitPay since it is their first partnership with a government agency.

Launched in 2009, Bitcoin (BTC) is the most popular and widely-used cryptocurrency in the world with a market cap of USD 150 billion and daily trading volume of several billion dollars. Bitcoin Cash (BCH) was created in August 2017 by forking Bitcoin; it has all the characteristics of Bitcoin besides a protocol change which allows more transactions and lowers fees via increasing block size to 8 MB. Since it has lower transaction fees than Bitcoin, it is cheaper to use BCH as an everyday currency, hence why it’s called Bitcoin Cash. BCH has a market cap of USD 25 billion and daily trading volume in excess of USD 1 billion per day, making it the most popular cryptocurrency behind Bitcoin, Ethereum, and Ripple.

The tax collection office of Seminole County will be using BitPay, which provides technology that allows merchants to easily accept cryptocurrency and convert it to USD or other fiat currencies. BitPay protects merchants from price volatility by instantly converting cryptocurrency to fiat at the time a sale occurs. This is why the tax collector chief, Joel Greenberg, is able to say he does not perceive any risk to the county from price volatility by accepting cryptocurrencies.

Accepting cryptocurrency payments actually reduces payment risk, since cryptocurrency is irreversible, unlike credit/debit card payments which can be reversed in identity theft cases, resulting in hefty chargeback fees for the merchant. Payments with Bitcoin and Bitcoin Cash are cryptographically secure, and transparent since all transactions are viewable in the block explorer.

The Seminole County tax collector office will be accepting cryptocurrency payments for a wide variety of services including tag, title, registration, driver’s licenses, birth certificates, hunting and fishing licenses, as well as ad valorem and non-ad valorem taxes.

The fact that cryptocurrency is being viewed and utilized as a safe alternative to cash and cards by a tax authority is a good sign that the government is becoming more open to cryptocurrency usage, and is another mile marker on cryptocurrency’s road to becoming a global currency.

 

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Employees of Cryptocurrency Companies Take Bitcoin Salary Share

With the popularity of cryptocurrency on the rise, company employees working at startups such as Coinbase and Bitpay are happy to receive much of their salaries in Bitcoin.

Amongst cryptocurrency companies, payroll systems vary as to how they decide to pay their staff but frequently employees are offered to opt into systems where they can select their pay preferences and decide on a traditional paycheck to Bitcoin ratio.

Bitpay and Coinbase

Atlanta-based Bitpay handles a payroll for 52 employees, but it’s generally only the smaller percentage of younger workers who choose to be paid totally in Bitcoin. These younger employees with limited family commitments are often happy to invest their earnings across a number of other cryptocurrencies. For these employees, the financial banking crash of 2008 remains a stark warning of what can happen when banks get it wrong. They prefer to handle their own financial destiny.

Forty percent of Coinbase employees receive a percentage of their pay in Bitcoin and many have traditional investment strategies in addition to an allocation to cryptocurrencies. An interesting incentive programme gives new employees cryptocurrency to experiment with. These funds can either be invested or even sent to family members or friends.

Bitpay’s Jeremie Beaudry, the company’s financial services legal counsel, suggests that being invested in cryptocurrency can make one a “better researcher and educator”. If this is the case, then the Coinbase bonus scheme for new staff has some merit. However, Coinbase, like many other companies do have a strict trading policy. Also, many cryptocurrency online news sources have disclosure rules regarding personal crypto investments held by their employees which may limit their writers’ scope and coverage of news.

The future

External companies which handle payment of employee salaries under contract is by no means a new concept but online companies such as California-based Bitwage, operating since 2014, offers a premium account which enables users to receive salary payments in up to 25 different currencies including Bitcoin. Workers also can receive part of their pay in Bitcoin, even if this option is not offered by their employer.

 

 

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