BitGo, a Palo Alto-based startup that helps investors store cryptocurrency holdings, is adding compatibility with two new digital coins .
Starting Friday, BitGo said it will enable customers to keep Dash, a digital currency based on a tweaked version of the code behind Bitcoin, in digital wallets provided by the company. In the next couple of weeks, BitGo said it would add support for Lumens, a cryptocurrency associated with Stellar, an open source blockchain project that spun out of fintech giant Stripe in 2014.
Mike Belshe, BitGo’s founder and CEO, said his company would add the pair of coins because they “offer some advances, particularly around payments.” He revealed the news on this week’s Balancing The Ledger, Coins2Day’s video series on the intersection of finance and technology.
Dash, whose name abbreviates “digital cash,” features speed improvements that make “instant payments” possible, Belshe said. “They also have some privacy payments.” (Though just how private remains in dispute.)
Stellar’s Lumens, on the other hand, are focusing on “global payments more for consumers,” Belshe added. He noted that Lumens differ from Bitcoin, which investors tend to regard as a potential store of value, like a digitized version of gold.
BitGo offers support for 85 cryptocurrencies through its custody product, including Bitcoin, Ethereum, Bitcoin Cash, Litecoin, and Zcash. Last month, the company debuted BitGo Trust, a qualified custodian for digital assets, approved by financial regulators in South Dakota.
Custodial products are a hot category for cryptocurrency companies, which are competing to satisfy the legal and security requirements compulsory for many institutional investors. Cryptocurrency exchanges, such as Coinbase and Gemini, have introduced offerings this year, and rumors continue to swirl that big banks, such as JPMorgan Chase, are eyeing an entrée into the market as well.
Belshe contends that BitGo’s product is a better choice than other presently available options because it is the company’s sole focus. He said of cryptocurrency exchanges: “What they’re really doing is trying to hold funds so they’ll use their exchange.”
He adds: If the New York Stock Exchange went to the U.S. Securities and Exchange Commission “and said, ‘Hey, please let us be a custodian for the assets that we trade,’ the SEC would laugh them out of the room.” In his view, the presence of competing interests within a single organization “does open up that potential for abuse.”