Square becomes the ninth firm to obtain a “BitLicense” from New York, to let state residents buy and sell bitcoins through its Cash App
NEW YORK (Reuters) - Square Inc (SQ.N), the payments company founded by Twitter Inc (TWTR.N) CEO Jack Dorsey, has obtained a license to offer …
Context & Ripple Effects
Square has been building toward this since late 2017, when it began testing Bitcoin support with a small group of Cash App users, and by February 2018 Jack Dorsey said nearly all users could trade — except residents of New York, Georgia, Wyoming and Hawaii, where the app lacked regulatory clearance (Dorsey confirmed the state exclusions). The BitLicense, of which Square is now the ninth holder, closes the biggest of those gaps.
The license matters because New York was the largest blocked market, and because Square had already committed to Bitcoin as a product line rather than an experiment — a bet that later showed up in results, when Cash App's Bitcoin revenue outpaced its fiat revenue for the first time in Q1 2020.
First-order effects
- New York residents can immediately buy and sell bitcoin through Cash App, removing the largest state-level hole in Square's coverage map as of February 2018.
Second-order effects
- With the ninth BitLicense issued, rival consumer payments apps face mounting pressure to clear the same New York hurdle or concede the state's retail crypto trading to licensed incumbents like Square.
Third-order effects
- If the pattern holds, state-by-state licensing becomes the gating step for consumer crypto distribution in the US — a structure Square itself validated by extending Cash App Bitcoin to all 50 states within two months of winning the New York license.
The trend: Consumer fintech apps are treating regulatory licenses like the BitLicense as the prerequisite for scaling retail bitcoin trading nationwide, with Square setting the template.