Coinbase Launches First Regulated US Bitcoin Exchange

Bitcoin services provider Coinbase launched a U.S. exchange on Monday that is already approved by regulators in 24 jurisdictions, including California and New York, the company said.

Until now, Coinbase has acted largely as a brokerage for bitcoin users. By opening an exchange, the company will be able to “offer greater security for individuals and institutions to trade bitcoin and monitor real-time pricing of the cryptocurrency,” the company told The Wall Street Journal.

Although it’s currently limited to U.S. bitcoin users, Coinbase CEO Brian Armstrong said his company ultimately plans to expand the exchange to users overseas. “Our goal is to become the world’s largest exchange,” he said.

Armstrong told CoinDesk that the exchange will have a full order book and limit orders. Users in 23 states (Alabama, Arkansas, California, Delaware, Georgia, Idaho, Illinois, Indiana, Iowa, Kansas, Massachusetts, Mississippi, Missouri, Montana, New Hampshire, New Jersey, New Mexico, New York, North Dakota, South Carolina, Washington, West Virginia and Wisconsin) and Puerto Rico have access to USD wallets and may use the exchange. Coinbase hopes to have regulatory approval in all states in the next six months, Armstrong said.

The company will offer users fee-free trades until March 30, 2015, and will take a 0.25 percent commission fee on all transactions after that.

The launch comes shortly after an announcement on Thursday (Jan. 22) by Cameron and Tyler Winklevoss that they plan their own U.S. bitcoin exchange. That exchange, dubbed Gemini, was also touted as the first to operate with full regulatory approval, but is not yet open to the public. The launch timing for Coinbase’s exchange was not influenced by the Winklevoss announcement, Armstrong said.

Coinbase now has $106 million in investment funding behind it from investors that include Andreessen Horowitz, the Draper Fisher Jurvetson Growth Fund, Union Square Ventures, Ribbit Capital and, after Coinbase closed a $75 million Series C funding round last week, BBVA, the New York Stock Exchange, Fortune 500 financial services group USAA and Japanese telcom giant DoCoMo.