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Dwolla Ends Support for Virtual Currency Bitcoin.

Started by youtube forex, Jul 13, 2020, 07:22 am

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Dwolla Ends Support for Virtual Currency Bitcoin.
By Kevin Woodward.
Person-to-person and mobile payments company Dwolla Corp. is ending support for Bitcoin and other virtual currencies effective Oct. 28, Dwolla announced on Friday.
Less than 0.1% of Dwolla's merchants use virtual currencies, Des Moines, Iowa-based Dwolla says in a statement. "Dwolla has notified the few affected merchants and is working to ease the transition for them and the few users affected by the decision," Dwolla says. "Dwolla does not sell, accept, mine, value, take possession of, or hold Bitcoin or any other virtual currency product. None of Dwolla's users transact business with Dwolla using Bitcoin or any other virtual currency product.
" Bitcoin is an electronic currency developed and maintained by a decentralized network of cryptologists and application developers. It offers anonymity, international utility, and inflation protection, and has no connection to existing payment systems. Users can download software from a number of so-called exchanges that provide Bitcoins at prevailing exchange rates. Specialist processors serve merchants.
To send Bitcoins, users enter the recipient's e-mail address and the amount to be transferred. The user's computer then digitally signs the transaction and sends the information to the Bitcoin network. The network verifies that the person sending the Bitcoins is the current owner. Once the transaction is validated, recipients can spend the Bitcoins. The process, which typically takes a few minutes, is not reversible.
In May the Department of Homeland Security ordered Dwolla to cease wire transfers between itself and Mt. Gox, a large Bitcoin exchange, which enables users to buy and sell Bitcoins. DHS also seized funds belonging to a subsidiary of Japan-based Mt. Gox held in a Wells Fargo & Co. account that was used to accept funds in U.S. dollars. Mt. Gox allegedly violated federal law by operating through an unregistered money-transmitting business, according to DHS.
A Dwolla spokesman would not comment beyond its statement. "As Dwolla gears up for its next stage of growth and offerings, it's essential that company resources remain focused on the deadlines, products, partnerships and users that will help grow the company, and that regulators have a firm understanding of our technology and its potential inside existing U.S. financial systems," Dwolla says.
Dwolla's concern is the lack of a clear understanding of the risk of dealing with a Bitcoin transaction, says independent payments analyst Beth Robertson. "There's a lot of unknowns in the realm of virtual currencies, and that can relate to current and additional legislation, and its potential use for illegal and money laundering services," Robertson says.
Such risk potential merits Dwolla's hesitation regarding virtual currencies, says Aleia Van Dyke, a payments analyst at Javelin Strategy & Research, Pleasanton, Calif. Managing security and risk are paramount for emerging payment schemes, she says. "For any of the new top payment platforms, they have to pick their battles wisely," Van Dyke says. "They're trying to make sure they are presenting an image that will be sustainable in the long term."