Coinbase announced today it has enabled USD wallets for its customers in 16 US jurisdictions, allowing those users to store dollar balances and make instant bitcoin purchases without waiting for bank transfers.
US-based customers now have the same option to store fiat currency that Coinbase customers in 13 eurozone countries have enjoyed since September, when it expanded bitcoin buying and selling beyond the US for the first time.
The company posted on its blog that the only way US customers could previously acquire bitcoin without delay was to enable 'instant buy', which requires a credit card.
With the new wallets, users can add USD whenever they like and dip into that balance for instant trades at a later date. They may also use the USD wallets to store proceeds from bitcoin sales and withdraw them to a connected bank account at any point.
Coinbase does not charge fees for deposits and withdrawals made via ACH (automated clearing house) bank transfers.
If you see this in your Coinbase account, your USD wallet is enabled.
Coinbase counsel Juan Suarez told CoinDesk the company has worked with its legal representatives and state regulators to assess whether its USD wallet is a regulated activity.
He said:
"Coinbase's cooperation with its regulators in the US and abroad is a priority company investment, and we will continue to collaborate with regulators to establish sanctioned avenues for Coinbase to offer its USD wallet and other Coinbase services – whether the approach is to regulate such services under conventional payments rules and laws, new bitcoin-specific guidance, or not to regulate at all. We hope to offer USD Wallet in all US jurisdictions in the near future."
To implement the new service, Coinbase needed to repurpose and adapt existing fraud detection algorithms for its ACH buys.
Customers in the following 15 states who have verified their accounts may access USD wallets immediately: Arkansas, California, Delaware, Georgia, Idaho, Illinois, Indiana, Massachusetts, Missouri, Montana, New Mexico, South Carolina, Washington, Wisconsin and West Virginia. The new feature is also available to residents of Puerto Rico.
Coinbase has so far offered customers the simple options of a bitcoin wallet and bitcoin cold storage called 'Vault'.
The company, which is reportedly worth $400m and is seeking to raise $60m to add to its current total $30m in funding, also offers merchant payment gateway tools and a 'one-click' bitcoin tipping tool. US dollar wallet image via Shutterstock