Bitcoin’s meteoric rise in 2017 also brought to the forefront the difficulties linked to buying and selling the digital currency.
Cryptocurrency exchanges require verification — a process called know-your-customer (KYC) — that can involve tasks such as taking photos of driver’s licences or confirming phone numbers. KYC can take hours or even days.
Meanwhile, the world’s largest Bitcoin exchange, Coinbase, no longer supports payment processing in Canadian dollars.
“They let me buy it. And I have it. But they will not let me sell it,” said Dave Feller, CEO of Mogo Finance Technology Inc. (TSX: GO).
“That just kind of highlights the issues consumers have.”
Feller hopes to fix that problem for Canadians who want to buy Bitcoin.
Mogo, a Vancouver-based fintech offering online loans aimed at younger people, is launching a service in the first quarter of 2018 that would allow members to buy and sell Bitcoin using the Mogo platform.
The fintech won’t launch its own exchange for MogoCrypto but is instead partnering with an existing exchange that it will make available through its platform. Meanwhile, the partnership sidesteps one of the other drawbacks of Bitcoin exchanges since Mogo members have already gone through the company’s own KYC process.
“Once Bitcoin and cryptocurrency really started to capture almost the mainstream attention, now you look at it and say the challenge for a lot of consumers is where do you go and do it?” Feller said.
“Even on local news, they’re quoting the price of Bitcoin but you can’t go to any bank or any trusted financial brand today that anybody has heard of.”
The CEO acknowledged most Bitcoin buyers aren’t using the cryptocurrency for its intended purpose — a currency to buy and sell products or services.
Instead, Feller likened it to the “Millennial version of digital gold” that members would like to invest in as they would a stock.
But he said it will be easier to sell bitcoins for Canadian dollars if members wish to use it for purchases through pre-paid Visa cards.
“We are looking at enabling the Mogo cards. So if we have $1,000 in Bitcoin and you want to spend $100 of it, you could potentially leverage your Mogo card and just convert $100 of it right there into Canadian dollars and use it,” he said.