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The History and the growth:

BTC China was one of three major exchanges started in the summer of 2011. Its contemporaries included Slovenian Bitstamp and the Russian BTC-E. Around that time, MtGox in Japan had the highest volumes in bitcoin market for USD trades. The exchange grew quickly in 2012, despite the close monitoring of Chinese officials. Chinese government and Central bank were starting to enforce threatening steps for the growth of Bitcoin. Despite the negativity, the platform being China’s only exchange for trading Yuan for bitcoins garnered positive press coverage on national television. After the fall of MtGox, the exchange has seen steady increase in volumes which was later pushed up by imposition of capital controls in 2015.

Operating structure:

BTC China has been in business since 2011 building an effective customer relationship. While the company offers services to almost every country in the world, 16 countries are excluded. These include the typical outsiders like Iran, Cuba, and North Korea. Accompanying them are residents in the US states of New Hampshire, North Carolina, and New York. Anyone can sign up with a photo of their passport, a selfie of themselves holding the passport. They would also need a third form of identification that can be a driver’s licenses or utility bill.

Benefits over traditional exchanges:

The exchange’s fee structure might really attractive for US Dollar traders. Buyers pay only 0.2 percent of a trade, with a minimum of one penny. This is on par with Bitfinex and better than Bitstamp’s 0.25 percent. Meanwhile, sellers can earn money on each trade, receiving a rebate of 0.05 percent for adding liquidity to the board. This beats both Bitfinex and Bitstamp which still charge money to sellers.

The new real-time exchange, currently in beta, offers Market, Limit, Stop, and One Cancels the Other (OCO) orders for spot trading. The Pro trading platform also provides 25x margin trading. The company now also offers a few other bitcoin services, including a bitcoin wallet, physical bitcoins, and a bitcoin mining pools. This would certainly make it very lucrative option for all the US based traders.

Bitcoin is a modern cryptocurrency that evokes mixed reactions and feelings in the traditional monetary and financial sectors. However, while the rest of the world was struggling to understand Bitcoin and its potential for disrupting the global economic landscape, New York was setting up regulations that would make the city a global hub for Bitcoin.

In fact, in 2015 New York’s Department of Financial Services (DFS) created rules that made it easy for Bitcoin to thrive and flourish in the city. One of the rules made to enable Bitcoin in the city was the requirement that all virtual currency firms in the state get a “BitLicencse”. The BitLicense was a sort of regulatory approval for them to hold customers fund and for them to provide exchange services for dollars and other currencies for virtual currencies such as Bitcoin.

New York has only issued 2 Bitcoin Licenses in Almost 2 years

Interestingly, the BitLicense can be used as a gauge of how well New York has succeeded in its bid in to become the Bitcoin Hub of the world. However, Reuters reports that New York seems to have lost its drive to champion the cause of Bitcoin; at least, based on inferences from the state’s issuance of BitLicenses.

Reuters reports that since 2015 when New York made the rules that would guide the operation of Bitcoin, the city has only issued two (2) BitLicenses. The more worrisome part is that the city has 15 pending BitLicense applications, four firms have withdrawn their applications, and four applications have been denied. One would think that New York would be crawling with firms dealing in virtual currency by now, but it appears that the city doesn’t have the momentum to stay the course of supporting Bitcoin.

However, in September, Deloitte said New York was in the third position behind London and Singapore as a fintech destination or hub. Of a truth, the fact that Bitcoin is a digital cryptocurrency that provides privacy in financial transactions has placed it in the black book for financial authorities. However, the fact that Bitcoin has many apparent advantages over fiat currencies makes it hard for financial regulators to dismiss or denounce it altogether. Hence, most financial hubs are choosing to group Bitcoin as a type of FinTech.

Why is New York losing momentum to champion Bitcoin?

One of the reasons behind New York’s lag in creating a Bitcoin hub is the exit of Benjamin Lawsky who headed the DFS last year when the rules were being created. Lawsky’s exit also led to the exodus of some key staffers who were knowledgeable about building regulatory framework for virtual currencies.

Patrick Murck, a lawyer and fellow at Harvard University’s Berkman Klein Center for Internet & Society observes that “by putting the regulations together and having key staff members leaving almost thereafter, they really put the industry behind the eight-ball in terms of competing with traditional service providers.”

The second reason New York has not been able to dominate the FinTech scene with a special emphasis on Bitcoin is that its regulatory process is cumbersome. The application fee costs a whooping $5000 and the documentation is reportedly about 500-pages long. It appears that the process for getting Bitlicenses is designed to ‘extract’ maximum information about users – a move which runs afoul to the founding principles of Bitcoin.

Tag: New York

The longest running Bitcoin Exchange is now open to USA Bitcoin Traders