Square, a crypto payment company, was granted Bitcoin trading approval from regulators this Monday which has allowed New Yorkers to trade digital currencies on the rapidly expanding Cash app. The app launched the crypto trading service in late January, but it was not available in New York.
Dan Dolev, an analyst at Nomura Instinet, said, “That was one of the missing pieces in their puzzle. They had approval in most states, but New York was by far the biggest one where you couldn’t trade bitcoin.” Meanwhile, Superintendent Maria T. Vullo stated that Square had been given a virtual currency license by the New York State Department of Financial Services which will further inflate the already expanding crypto market. Twitter CEO Jack Dorsey runs Square which now holds a money-transmitter license from the department.
The app was launched in 2015 and is enjoying greater success than PayPal’s Venmo as stated by Nomura Instinet. Additionally, it informed that download on Square Cash app averaged 128 percent yearly growth since 2016 which is higher than Venmo’s 74 percent growth rate. Dolev added that the new grant would improve the download percentage manifolds and users will be able to do much more with a single app.
He said, “This announcement gives people another excuse to download the app”, adding that it might not move the bottom line right away but “definitely helps from a marketing perspective.” The shares of the company skyrocketed by 88 percent since this year’s beginning and broke records after reaching $65 on Monday which is more than a 2 percent up on that day.
In the recent quarterly letter to its shareholders, Square claimed to serve over 7 million active users through its money transfer app. Dorsey said that the majority of clients were using the app more like a bank account against what the company hoped for. Although it was not meant to happen yet, the company has started to lean over the trend and has hinted about its plans to invade the banking sector.
In September, American Banker reported that the company had filed an FDIC license report to become an industrial loan company in Utah. Its approval will allow the company to perform services equivalent to banks, like issuing loans without needing consent from a financial entity or even a separate license for every state.
The Department of Financial Services has granted the ninth firm to conduct a crypto trading operation in New York with the likes of Coinbase and Circle. It has also approved charters to Paxos and Gemini Trust which was earlier known as itBit Trust.
It has been noticed that getting an approval to trade crypto in the leading commercial hub as regulations are pretty strict here. It would be interesting to see whether Square will be able to cash on a golden opportunity which can make it the biggest trading platform in the US.
Even if it does not beat its competition the company will be gaining just because of its entrance in the hot crypto market.