The Man Who Wants to Build a U.S. Bitcoin Exchange

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Feb. 26 (Bloomberg) –- Secondmarket Founder & CEO Barry Silbert discusses his plans to start a U.S. bitcoin exchange and how he says he could save bitcoin. He speaks to Trish Regan and Matt Miller on Bloomberg Television’s “Street Smart.” (Source: Bloomberg)

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Secondly, i thought it was interesting, the timing of your announcement that you are going to start your own bit point exchange right when mount cox took its exchange down, and they bought lots of weed to hide in their apartment.

Who knows?

This is entirely coincidental.

We were planning on doing it next week, but when we heard the rumors we thought -- why not counterbalance the storm that we saw coming?

How does it work?

We are setting it up in an interesting way.

We are looking at the stock exchange model with a number of firms regulated to tap into this exchange in close collaboration with a number of banks and regulators.

This is interesting.

I said this to you earlier, that there needs to be regulation in the market to trust it.

You made the point and made it again that part of the appeal is that it is not regulated.

How can you have a currency that is not regulated when it could be victim to situations like we have seen?

Well, my question is, of the currency itself, it cannot be regulated.

Someone told me this morning that they should shut it down.

How?

Shut off the internet?

Would you not feel better?

I would feel better to know that you were working with regulated banks.

To key activities have to be regulated.

One, the exchanges.

And then any companies that hold customer funds, like banks, should be regulated.

I do not think that minors or urchins should be regulated, but the banks a bit point and the exchanges.

The interesting thing here is that you have started an exchange before that have a lot of critics of a new asset class to be traded on the exchange and you were very successful.

And we did it in a regulated way.

If you work with the regulators -- but with a fight, first, right?

When you first said that you are going to trade pre-ipo shares of facebook i remember facebook not being cool with that to begin with.

You can describe it as a fight, it was just the industry trying to come to terms with the idea that an ipo is not the only and best way to get liquidity.

What has happened over time as it has become very common for these tech companies to use second market to provide liquidity for stakeholders.

In this new exchange business we decided up front to work with the banks, the bit coin industry, and regulators on day one.

This theoretically solves the liquidity issue, right?

If you want to take a bit point out, mountgox aside, it is challenging.

It is a fragmented business.

If you want to sell or buy a lot, -- there is a guy on 40, broad street, selling.

It solves that problem.

The way that we are going to do this is where looking at the gold market and we want to slow down the price discovery process , may be running a once or twice per day option where the price is not change for another day.

The idea is to slow down the intraday volatility where the price of coffee is five percent higher or lower.

Could you not do this with some other current see?

We will set it up in a way where any member of the digital exchange wants to make a market, it could be on the exchange, but i think that it coin is the winner and the focus at the outset is going to be focusing on bit going to dollar exchange.

But you will be able to trade other digital currencies.

As a member-based exchange, all the regulated entities -- a lot of it is how it begins as a democratic process.

Kind of.

Why do you need it coin if you could use paypal or some other mobile payment system?

I think that bit point is potentially going to transform the way that money moves around the world, the way that people think about money.

People talk about payments being disrupted.

I personally feel that bit point is becoming a fantastic alternative to gold.

It has a lot of the attributes of gold.

What it has that goal does not is utility.

As you know you can go buy beer.

I spent a week only spending bit coin.

It was not incredibly easy and i did not pay phone bills.

You did buy pizza.

I bought the whole office pizza.

Some 50,000 merges -- merchants.

I bought plane tickets, video games at gamestop, victoria's secret stuff.

If you're so inclined.

And you were, apparently.

It is a digital currency that is not going away and banks understand that exchanging one he forbid currency is a service they will have to -- it is also key to think about a payment that we do not consider today.

Like machine payments that we will have to deal with at some point, like driverless cars.

But what is interesting here is how people like yourself are coming out and saying that we would embrace some regulation here.

Absolutely.

Relation done properly is not bad.

The only way they will be successful is if they work within the successful space.

By the way, senator joe mansion came out and called for a sort of crackdown on bit coin in a letter that he wrote to regulators.

You do not always think of democrats in west virginia as the economic giants of our society, but he is a very smart and honorable man, i assure.

What do you think about his comments?

From what i read how it is similar to senator schumer from a few years ago.

If you read his recent comments, he has come to appreciate the possibility of bit coin.

Senator carter has well has come out very positive on that.

What about western union, in the long run?

They will have to incorporate it into the business.

I want them to be founding members of the exchange.

You are going to reduce their margins, though.

It is going to happen either way.

This text has been automatically generated. It may not be 100% accurate.

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