Robinhood Gets New York State Cryptocurrency License

Mobile trading application operator Robinhood announced on Thursday afternoon that it has received a license to provide cryptocurrency trading services in the state of New York.

A statement issued by the company indicates that it has received a virtual currency license - or BitLicense - from local regulators.

The company also said that it has received a money transmitter license that will better enable its clients, as well as the company itself, to make and receive Payments Payments One of the bases of mediums of exchange in the modern world, a payment constitutes the transfer of a legal currency or equivalent from one party in exchange for goods or services to another entity. The payments industry has become a fixture of modern commerce, though the players involved and means of exchange have dramatically shifted over time.In particular, a party making a payment is referred to as a payer, with the payee reflecting the individual or entity receiving the payment. Most commonl One of the bases of mediums of exchange in the modern world, a payment constitutes the transfer of a legal currency or equivalent from one party in exchange for goods or services to another entity. The payments industry has become a fixture of modern commerce, though the players involved and means of exchange have dramatically shifted over time.In particular, a party making a payment is referred to as a payer, with the payee reflecting the individual or entity receiving the payment. Most commonl Read this Term.

As a result of its receiving the license, traders living in New York can now trade cryptocurrency, with no commission fees, using the Robinhood mobile application.

Users can invest in seven different Cryptocurrencies Cryptocurrencies By using cryptography, virtual currencies, known as cryptocurrencies, are nearly counterfeit-proof digital currencies that are built on blockchain technology. Comprised of decentralized networks, blockchain technology is not overseen by a central authority.Therefore, cryptocurrencies function in a decentralized nature which theoretically makes them immune to government interference. The term, cryptocurrency derives from the origin of the encryption techniques that are employed to secure the netw By using cryptography, virtual currencies, known as cryptocurrencies, are nearly counterfeit-proof digital currencies that are built on blockchain technology. Comprised of decentralized networks, blockchain technology is not overseen by a central authority.Therefore, cryptocurrencies function in a decentralized nature which theoretically makes them immune to government interference. The term, cryptocurrency derives from the origin of the encryption techniques that are employed to secure the netw Read this Term, including Bitcoin and Ethereum.

Robinhood - from equities to crypto trading

The company launched its cryptocurrency trading service back in February of last year.

Since then it has been making rapid strides in getting regulatory green lights from local regulators in different states across the great USA.

Robinhood has gained massive traction amongst young Americans, with the company onboarding millions of clients since its founding in 2013.

The company started out providing commission-free trading in stocks, and that remains its most successful product.

Though they claim to make the bulk of their cash interest on client deposits and the $6 a month fee it charges for its 'gold' service, it seems that the company's real money generator is selling order flow to high-frequency traders.

According to a report by financial analyst Logan Kane on Seeking Alpha, the company makes hundreds of millions of dollars selling order flow to these high-frequency trading companies.

Whether or not the company will be able to do the same for its cryptocurrency service is an interesting question. After all, many firms trade in equities but its less clear that they are interested in, or already trading in, cryptocurrencies.