Cryptocurrency Exchange CoinMKT Announces US Banking Partner

Daniel Cawrey
Jan 21, 2014 at 15:30 UTC
Updated Jul 24, 2014 at 11:39 UTC

Los Angeles bitcoin exchange CoinMKT has announced a US-based banking partner. As a result, the company is now able to accept bank wires from US bank accounts.

Travis Skweres, CEO of CoinMKT, says he expects the company to grow as a result.

“We’re confident our growth will explode being able to accept wires deposits that can be credited same day or next day,” he said.

Not many exchanges currently have the ability to accept banking wires, and the ones that do have experienced massive user expansion. Exchanges that have the ability to link directly to the US dollar via a banking institution are more attractive to investors. Skweres told CoinDesk that his company has added staff in order to meet the expected demand.

“We have 8 employees now, so we have hired to enhance customer support as well as accelerate feature development.”

The company is also announcing the addition of three more altcoins to its exchange: Megacoin (MEC), Worldcoin (WDC) and Quark Coin (QRK). Terracoin (TRC), which CoinMKT is now referring to as “problem plagued”, is being removed.

As a result, CoinMKT users can now trade between USD and nine cryptocurrencies in total. All of them are listed here, with informational resources for each. Additionally, users now have the ability to trade bitcoin for each of the eight altcoins. For example, there is a BTC/LTC pair for bitcoin/litecoin and a BTC/FTC pair for bitcoin/feathercoin trading.

Maker-taker structure

The company is also switching its commission structure to a ‘maker-taker’ setup. This adds an incentive for market makers, those who are selling a cryptocurrency on a particular market.

Essentially, it helps to better fill an order book, something that BTC China has already implemented. That exchange has seen impressive volume gains, which may partially be attributed to its maker-taker structure. Skweres observed:

“This is a popular method in many FOREX (foreign exchange) platforms, and it’s being experimented with in crypto, you’re basically paying market makers to trade instead of charging them.”

Larry Harris, a professor at the USC Marshall School of Business, recently wrote a paper entitled ‘Maker-Taker Pricing Effects on Market Quotations’. In his abstract, he writes that his research found “the exchange maker-taker pricing scheme affects incentives to take or make markets resulting in narrower bid-ask spreads”.

The more narrow the spread is, the more liquidity that exists in an exchange as buyers and sellers are closer to bid and ask amounts.

That’s good for cryptocurrency trading, since there’s a general lack of that attribute in many exchanges. CoinMKT’s new maker-taker commission structure means that the taker is charged 0.75%. CoinMKT then takes 0.5% as part of its fee, and the the maker is rewarded 0.25%.

Maker-taker aside, the US banking partnership is clearly the most significant of the company’s announcements. Yet there are also many other options available for CoinMKT deposit and withdrawals, according to Skweres.

“US customers now have the option of wire or money order. Foreign customers have wire, money order, OKPay or Egopay as choices,” he said.

Currency image via Shutterstock

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