Leading Europe-based bitcoin exchange Bitstamp has been granted a license as a regulated Payment Institution by Luxembourg. The license is passportable across the 28 EU member states.
Bitstamp will become the world’s first nationally licensed bitcoin exchange in Europe when it relocates its headquarters to Luxembourg on July 1, 2016. At the same time, the exchange announced the launch of EUR/BTC trading.
This approval follows a nearly two-year application process with the Luxembourg Financial Industry Supervisory Commission (CSSF) and marks a significant milestone for bitcoin and digital finance in Europe, according to Luxembourg’s Minister of Finance, Pierre Gramegna.
“Luxembourg has a long-standing history as an international leader in innovation,” Gramegna said in a statement. “That Bitstamp has chosen Luxembourg as its European hub only strengthens that reputation. Bitstamp is a most welcome addition to Luxembourg’s fintech ecosystem.”
Recognized for its strengths in digital payments and data privacy, Luxembourg is already home to European headquarters for companies such as Amazon, PayPal, PayCash and SIX Payment Services.
Dan Morehead, CEO of Pantera Capital and a Bitstamp investor and chairman, said Luxembourg sets an example for other countries looking to engage with the bitcoin industry.
“Luxembourg recognizes the economic potential of bitcoin and blockchain. Nations hosting major blockchain industry centers could see meaningful economic benefits. Governments may feel pressure to compete after moves like this by enabling the industry, which is a clear advantage,” Morehead said.
“Bitstamp becoming the first nationally regulated bitcoin exchange is a historic achievement for digital currency.”
Before Bitstamp, Luxembourg had already granted a Payment Institution license to SnapSwap International, a company focused on payment services that use blockchain technology, cryptocurrencies and internet protocols.
Bitstamp invested significant time and resources in the regulatory process, demonstrating the company’s commitment to regulatory compliance, said Nejc Kodrič, co-founder and CEO of Bitstamp.
The license not only represents an important achievement for the digital currency industry but also suggests that historical reservations about the sector can be addressed and overcome through clear regulation.
“When Pantera first invested in Bitstamp in 2013, the digital currency industry was a virtual Wild West — a promising frontier, yet largely unregulated and uncertain. Today’s announcement represents a major step in the industry’s maturation,” Morehead wrote in a Pantera statement.
“As an investment firm focused exclusively on digital currency and blockchain, we believe this industry has the potential to be immensely valuable in the future,” he added.
“We’re eager to see what lies ahead for Bitstamp, bitcoin, digital currency, and blockchain following this regulatory milestone.”