Square gets NY State cryptocurrency license for it’s Cash App

Posted on: July 3rd, 2018 by jms No Comments

Photo by Marjan Grabowski on Unsplash

 

Square’s Cash App is a hugely popular app for sending and receiving money, and now New York residents can use the app to buy and sell Bitcoin. According to Square’s website Bitcoin can be traded with no conversion fees, which is nice. Although their exchange rate calculations are not entirely clear. According to Square, the exchange rates are

 

“…calculated using the current market rate across the most popular U.S. exchanges, plus a spread determined by the size of your transaction and market volatility. The exchange rate may differ between transactions, and may also differ from exchange rates available to you from other buyers and sellers of Bitcoin.”

 

To me, this sounds like they will take an average (possibly weighted) price from “popular exchanges” along with a spread based on current buy/sell rates, and use that to come up with a somewhat fair, but also somewhat manipulated price. The average cost calculated with a spread may allow for some sort of arbitrage on the back-end, which is where Square can profit from each transaction. Still, this is another step forward for Bitcoin and cryptocurrencies alike. With companies like Square taking big steps like this to help legitimize and promote cryptocurrencies, it seems the cryptocurrency age is just getting started.