With bitcoin’s price surging above $1,500 for the first time this week, the Federal Reserve has been in the midst of a two-pronged crackdown on the digital currency.
In response, some of its peers are looking to the Fed to intervene in the bitcoin space, with Coinbase trading as high as $3,000 on Wednesday.
“The Bitcoin and cryptocurrency community has experienced a sharp decline in its price and it has created a lot of pressure on the regulators,” said Alex Bledsoe, co-founder and CEO of Coinbase, in an interview with CoinDesk.
Bledsoes firm is one of several firms offering cryptocurrency trading platforms in response to the bitcoin-related crackdown.
Coinbase, which was founded in 2014, offers bitcoin-based trading in the U.S. and in other countries, and is one example of a cryptocurrency exchange that has successfully raised money through crowdfunding.
It’s a niche industry, and many of its services are for small and medium-sized businesses, according to Bledssoe.
For example, the company has partnered with the San Francisco Bay Area coffee shop Café Coffee, which allows users to trade bitcoins for lattes, and the New York City-based cryptocurrency exchange Bitcoin Cash, which uses the same token to buy and sell Bitcoin.
For Coinbase, this isn’t just a matter of offering bitcoin trading services.
Bled’s firm offers trading platforms for bitcoin, ether, litecoin, and zcash.
Bly, who oversees about 40 companies, has focused on the blockchain, the ledger of transactions, that underpins bitcoin and other cryptocurrencies.
He recently announced a partnership with blockchain startup CoinLab to help the company build out its infrastructure.
While there is a significant overlap between the types of businesses that Bled is looking to partner with, he said, they are different enough that it makes it difficult to separate them.
“For Coinbase to be able to serve a large amount of users, they need to be large enough to support the infrastructure and to provide a lot more features,” he said.
Bly said the company is currently working on integrating the Bitcoin Core software, which is the core of the bitcoin software that powers most of the exchanges.
But for now, he is focused on developing its software for bitcoin.
“We have a lot to offer with the Bitcoin protocol, but we need to build out the infrastructure to get it up and running,” he added.
Bliedsoe said his firm has been working with CoinLab since 2015 and that CoinLab has “been the backbone of many other cryptocurrency exchanges.”
He noted that the company currently has around 500 employees, and that the firm is expanding to a larger facility in Atlanta in 2018.
“In general, the market has changed a lot since we started,” Bled said.
“I think it is important for our customers to know that we are working closely with Coinlab and that we will continue to be there if they need us.”
Bleds said that while he was able to convince the Fed not to issue a new regulation on bitcoin in the past, Coinbase would likely be willing to do so if it feels that its customers will benefit.
“If we are able to get them to go through the process of getting the regulations lifted, I think we could have a pretty good argument for doing it,” he explained.
The SEC has said it will likely issue guidance on bitcoin exchanges sometime this year, and Bled noted that he is confident the regulator will issue some form of guidance in the near future.
“The bitcoin community has grown in size and sophistication over the last year, but I think it will take a while for the community to really come to grips with the full extent of the problems with bitcoin and the issues surrounding it,” Bly said.