Bitstamp, one of the major bitcoin exchanges, is reportedly going to enter into agreement with the government of Luxembourg to launch regulated and licensed services across 28 European countries. The exchange may soon obtain an electronic money institution (EMI) license or payment institution (PI) license from regulatory bodies.
Launched in 2013, Bitstamp has turned into one of the most popular cryptocurrency exchanges. The deal with the Luxembourg authorities will make it the first regulated and licensed virtual currency exchange in the European Union.
In September of last year, another cryptocurrency exchange Circle received a bitcoin license from New York State’s financial regulator, thus becoming the first US-based regulated exchange in the state. A few days ago the company obtained an electronic money license from the Financial Conduct Authority for launching their services in the UK. Meantime, it partnered with Barclays that will let Circle to hold pound sterling for its customers. This is the first time that the globe’s leading bank agreed to deal with the exchange operating in the bitcoin industry.
In addition to bitcoin trading, Bitstamp allows its users to buy physical gold using their funds. Earlier this year, the company partnered with brokerage firm Moro & Kunst to let customers use virtual currency to acquire gold, as earlier it could be exchanged only for US dollars.
Gold has always been considered a valuable source of capital preservation due to its stable value. If compared with bitcoin, whose price has been too volatile, gold seems more attractive as an investment.
However, the last days’ statistics proves the opposite. Over the past few weeks, the Wall Street Journal reports, the price of bitcoin remained more stable than those of gold. Some attribute this to the fact that investors are starting to perceive virtual currency as more secure store of value.
According to Wedbush Securities, the bitcoin transaction volume increased from 200,000 in 2012 to over 6 million this March. A managing director at Wedbush Securities, Gil Luria, says that virtual currency has taken on a role similar to gold in view of its growing usage. Investors may be interested in keeping bitcoin when they lose trust in traditional stores of wealth.
Still, the latest stability in prices may not be enough for investors to pour their money into digital assets. The investing community has faced a number of security and regulatory issues related to bitcoin.
Phillip Kingston, a managing director at Trimantium Capital, considers it will likely take a lot of time until investors become confident about digital currency. There are still high risks associated with bitcoin if compared to gold.