Paradigm Shift? Digital Currency 7 - Where's My Cut?
And the regulators descended upon them like locusts... with their hands gleefully grasping at a piece of the action...
The ability to exchange cash for bitcoin, and keep those transactions anonymous, has made the currency attractive to criminals.
The New York Department of Financial Services moved a step toward creating a bitcoin license that’s seen as helping move the digital currency into mainstream use.
The bank regulator issued a draft of its “BitLicense” regulatory framework for New York virtual currency businesses.
Ah the ubiquitous banking regulator can now wet his beak by issuing a license.
Please read the fine print and disclaimers...
P&P - A licensee will have to have policies and procedures to handle consumer complaints. A requirement that seems...
squarely aimed at preventing the situation customers of bankrupt bitcoin exchange Mt. Gox found themselves in.
Mt. Gox was a Bitcoin exchange based in Tokyo, Japan. It was launched in July 2010, and by 2013 was handling 70% of all Bitcoin transactions.
In February 2014, the Mt. Gox company suspended trading, closed its website and exchange service, and filed for bankruptcy.
announcing that around 850,000 bitcoins belonging to customers and the company were missing and likely stolen, an amount valued at more than $450 million at the time.
Although 200,000 bitcoins have since been "found", the reason(s) for the disappearance—theft, fraud, mismanagement, or a combination of these—are unclear as of March 2014.
So along with the licensing come rules, requiring processes, enforced by procedures, necessary record keeping and overall compliance.
Accountability - Each licensee must maintain a bond or trust account in U.S. dollars for the benefit of its customers.
Record Keeping (Who, What, When, Where) - For every exchange, each firm must record and keep the identity and physical addresses of the parties involved.
Not so foot loose and fancy free, compliance has its costs. And what of service levels? Customer complaints go where? Customer Service.
We ask what are existing payment processing players, read PAYPAL, doing to head this "new paradigm" off?
Paypal has a huge existing base, and they have service levels to maintain and a "value added" service called CUSTOMER SERVICE.
We harken back to Reggie Middleton...
More to come, no flippin.
Paradigm Shift? Digital Currency 8 - Virtual Exertion?
Paradigm Shift? Digital Currency - Index
The ability to exchange cash for bitcoin, and keep those transactions anonymous, has made the currency attractive to criminals.
The New York Department of Financial Services moved a step toward creating a bitcoin license that’s seen as helping move the digital currency into mainstream use.
The bank regulator issued a draft of its “BitLicense” regulatory framework for New York virtual currency businesses.
Ah the ubiquitous banking regulator can now wet his beak by issuing a license.
Please read the fine print and disclaimers...
P&P - A licensee will have to have policies and procedures to handle consumer complaints. A requirement that seems...
squarely aimed at preventing the situation customers of bankrupt bitcoin exchange Mt. Gox found themselves in.
Mt. Gox was a Bitcoin exchange based in Tokyo, Japan. It was launched in July 2010, and by 2013 was handling 70% of all Bitcoin transactions.
In February 2014, the Mt. Gox company suspended trading, closed its website and exchange service, and filed for bankruptcy.
announcing that around 850,000 bitcoins belonging to customers and the company were missing and likely stolen, an amount valued at more than $450 million at the time.
Although 200,000 bitcoins have since been "found", the reason(s) for the disappearance—theft, fraud, mismanagement, or a combination of these—are unclear as of March 2014.
So along with the licensing come rules, requiring processes, enforced by procedures, necessary record keeping and overall compliance.
Accountability - Each licensee must maintain a bond or trust account in U.S. dollars for the benefit of its customers.
Record Keeping (Who, What, When, Where) - For every exchange, each firm must record and keep the identity and physical addresses of the parties involved.
Not so foot loose and fancy free, compliance has its costs. And what of service levels? Customer complaints go where? Customer Service.
We ask what are existing payment processing players, read PAYPAL, doing to head this "new paradigm" off?
Paypal has a huge existing base, and they have service levels to maintain and a "value added" service called CUSTOMER SERVICE.
We harken back to Reggie Middleton...
PayPal has already imbued its service with much of the attributes that are being offered by the Bitcoin payment processors. They also have a material advantage as of right now, a massive installed base. I also cannot emphasize enough how damaging the all too necessary customer service option is to margins. You see, the problem is most service companies don't put enough into customer service and handholding of the customer.Looks like the Bitcoin's of the world are going to be performing some compliance, hand holding and seeing some margin compression?
More to come, no flippin.
Paradigm Shift? Digital Currency 8 - Virtual Exertion?
Paradigm Shift? Digital Currency - Index
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