Friday, December 7, 2012

Bitcoins, the Web's Digital-Only Currency, Will Soon Have Its Own Bank

Posted By on Fri, Dec 7, 2012 at 4:42 PM

Bitcoins, if you're not familiar, are a digital currency that have been established by those on the internet become, in some circles, the currency of the internet, due in part to its largely untraceable nature—and the fact that they're not backed by a government whose economy is unstable is a plus (we're looking at you, European Union).

Truth be told, I hardly understand bitcoins and bitcoin economics. They're an interesting concept as an alternative to government- or corporation-backed systems, but they still confuse me—thus, I stay away from them and continue to take my pay in good ol' American money.

But, interestingly enough, it appears that there will soon be a central Bitcoin bank established in France, of all places. From Paymium, via Geekosystem:

We're announcing today that Bitcoin-Central.net is getting, through a partnership with Aqoba and the Credit Mutuel, allowed to operate as a bank, (or more precisely a PSP which is basically the same as a bank, just without the debt-money issuing part).

Some people might argue that regulation is a bad thing. We respect this opinion, but we'll have to agree to disagree.

But this is not only some regulatory detail, it has dramatic implications for us, our users, and... our competition

Let's go over a couple of them:
Our user's funds will actually be held at the Credit Mutuel under the user's name, they will be separate from Paymium's funds (on the other hand, all of other exchanges funds for example sit in the same account, and are considered by their bank to be their corporate property)
Our user's accounts will be protected by the "Garantie des dépôts" which is the French equivalent of the American FDIC (the insurance cap applies to each account individually, and not to the sum of all user balances, so unless your EUR balance exceeds 100kEUR your fiat is 100% insured by the French taxpayer)
Each account will in a few months get its very own IBAN number, users will be able to use it as any other bank account, have their salaries and pensions sent there and have them automatically converted to Bitcoin if they so wish)
Each user will soon be able to order its own debit card that will use their EUR and BTC balance to honor purchases and cash withdrawals
We'll have direct access to the banking networks which will let us 100% automate all incoming and outgoing transfers
Corporations will have an actual financial institution talking with them if they wish to start accepting Bitcoin and be safe from a regulatory point of view
Paymium will have a much better legal standing and a much higher attractivity for second and third-round investors
Paymium will be in a much better position to make its vision become true : make all our transactions, be they denominated in crypto or fiat currency, flow through the pipes of the Bitcoin network

We may very well be looking at the currency of the future here, folks. And it's only hardly more made-up than most currencies! Hooray!

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