Say hello to the European Union’s first nationally licensed Bitcoin exchange.
Bitstamp, a Slovenian Bitcoin exchange now based in the United Kingdom, said on Monday that it had received a license from Luxembourg’s Ministry of Finance to operate as a payment institution. The regulatory approval extends beyond the country’s borders to the rest of the 28 EU member countries.
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This is the first time that a Bitcoin exchange has achieved such official backing in Europe, Wiredreports, citing Jean-Louis Schiltz, a lawyer in Luxembourg who helped Bitstamp win the approval. The licensing, which took nearly two years of regulatory scrutiny to realize, could present a clear path for gaining government endorsement to other Bitcoin exchanges.
“I believe that others will follow relatively quickly,” Bitstamp CEO and founder Nejc Kondrič told Wired. “They have an easier task.” (The company did not immediately respond to Coins2Day’s request for comment.)
Bitstamp earlier tried and failed to gain similar approval in the U.K., where the five-year-old company relocated in 2013. A couple of years later in 2015, hackers stole $5 million from it. The attack, though bad, was not nearly as crippling as the security breach that a year earlier robbed Mt. Gox, then a top Bitcoin exchange based in Japan, of $460 million, leading to its bankruptcy and a major setback for the digital currency worldwide.
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A few Bitcoin companies in the United States have made regulatory headway, too.
New York State’s Department of Financial Services granted an exchange created by itBit, a Bitcoin startup, a charter in May 2015. New York awarded its first “BitLicense,” which permits a company to offer virtual currency services, to the Boston-based Bitcoin wallet company Circle in September. In October, the state approved Gemini, an exchange created by Cameron and Tyler Winklevoss, Olympic rower twins best known for their legal squabble related to Facebook’s (FB) origins.
Bitcoin, the most popular cryptocurrency by far, is still regarded by many people as a fringe financial experiment. The digital money, which allows people to transact quickly and seamlessly, is sure to face many regulatory hurdles to come as it vies for mainstream acceptance.