Square can now facilitate the buying and selling of bitcoins all across the United States. This comes after the cash app obtained “Bitlicenses” for the remaining states that were yet to be covered. According an announcement by the company – which was co-founded by Jack Dorsey, Twitter chief executive – the exchange of the flagship digital token has been extended to all 50 states.
Cash reserves
Starting January of this year, Square let its customers complete transactions with Bitcoin although without such services in New York, Georgia, Hawaii and Wyoming. This was as a result of tight restrictions that hindered any form of use of cryptocurrencies for transactional purposes. As CoinDesk reports, it was difficult for crypto exchanges to operate in Wyoming and Hawaii because, up until March, the states required the platforms to hold cash reserves equal to the worth of the digital tokens fund managers held for customers. On removal of the requirements, the Cash App immediately landed the Bitcoin buying service.
For the State of New York, all a company required to operate was a licence, dubbed “BitLicense”. Accordingly, the firm acquired the permit and the operation is now up and running. Meanwhile, it is not yet clear how the company acquired the permit to operate in Georgia and Hawaii.
Square-Coinbase competition takes a new turn
As per the latest reports, the nationwide roll-out of the Bitcoin exchange operations has gained Square over $70 million in the first quarter of the year. Immediately after launching the operation, the company reported that it had earned close to $37 million from an investment amount of $36.6 million. This indicates a good profit margin given it was the immediate period after launch.
In fact, per reports, it seems Square zigs where Coinbase zags. In context, CoinDesk reported last year that Coinbase halted its Bitcoin exchange service in Hawaii in protest of the “double reserve requirements” which demanded the exchange to maintain an equivalent amount of cash reserve as that of the customers’ funds in cryptocurrency it held. Meanwhile, Square is making huge strides in these areas and netting huge profits in the process. Analysts are now billing Square to surpass Coinbase as the largest exchange in the near future if the current trend holds.
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