Unless you’ve been living under a rock for the last few years you likely are familiar with the term: Bitcoin. However, for those unfamiliar, Bitcoin is a digital currency which acts very much like paper money which can be used to purchase goods or even exchanged for real paper currency like Canadian or U.S. dollars. It’s also a payment method so anyone can send and receive money anywhere in the world very quickly.
Bitcoin has had a rocky road on its way to legitimacy in the realm of currency alternatives. One of the big innovations that helped spearhead it into mainstream attention was its use of a technology known as blockchaining. One of the remarkable features of a blockchain is that it is a unique, traceable, and unchangeable record of transactions. With such a unique ability it can help lower fraud cases in the financial sector saving big banks billions. This is why major financial institutions are taking blockchaining seriously and looking to expand their efforts by incorporating it.
With over 2 million Bitcoin users worldwide and growing, and its cemented respect in the financial sector, it continues to mature rapidly. One of these maturity milestones include the birth of BitLicense — a strict, certified guideline framework for getting licensed for Bitcoin and digital currencies operations in the U.S. Getting licensed is mandatory, very expensive, and very difficult to get. It was done to only ensure legitimate business ventures into the sector, protecting consumers. Licensing requires detailed background checks, proof of profitability, online security details, and more. At present Canada does not require a license, but it is in the works.
Rapid growth is a sure way to get the attention of investors and so to no surprise many new startups have jumped in to capitalize on it. One such venture, 21 Inc. is a collection of who’s who such as CEO’s from eBay, PayPal, and DropBox. Then there’s Vancouver-based Quadriga FinTech which are getting funding faster then they know what to do with it. Quadriga has become Canada’s top Bitcoin exchange.
Surprisingly, with the heavy interest in Bitcoin at present there haven’t been much chatter in the discount brokerage industry about making use of it for customer transactions or even operating an internal exchange of their own, allowing customers to have a unified location for a bitcoin wallet and stock securities. Although we’ve done comprehensive articles on brokerages like Questrade we have never uncovered any of them even considering incorporating bitcoins into their platforms. Maybe this will change in the future seeing as how more and more people are using bitcoin and online brokerages in their daily lives.