Indonesia’s central bank, Bank Indonesia, has issued a new statement defining its stance on bitcoin.
The comments bear similarities to others released over the past few months, but suggest the government will now take a hands-off approach to digital currency. Today’s statement differs slightly from the reports issued last month, in which Bank Indonesia’s deputy Governor suggested digital currency might break the bank’s rules.
Since then, representatives from the local bitcoin business community have participated in informal discussions with regulators to clarify the boundaries of their operating environment. The latest statement reads (translated from Indonesian):
“Noting the Law no. 7 of 2011 on Currency and the Law no. 23 of 1999 which was amended several times, most recently by Act no. 6 In 2009, Bank Indonesia states that the virtual currency bitcoin and others do not constitute currency or legal tender in Indonesia.
People are encouraged to be careful of bitcoin and other virtual currencies. All risks related to ownership/use of bitcoin will be borne by the owner/user of the virtual currency bitcoin and others.”
Local bitcoin entrepreneur Oscar Darmawan was optimistic about the statement, saying bitcoin users can now move foward with plans to promote its use in the world’s fourth-largest country by population.
“We are really glad for that stance. It seems Indonesia Central Bank’s final stance will be in neutral position and will not prohibit bitcoin in Indonesia. Indonesia will regulate bitcoin as an e-commodity instead of e-currency.”
He added: “Indonesia will have bright future for bitcoin to grow as ‘media transfer’ for payments, instead of for e-currency – as it should be. The stance will also means bitcoin will be regulated in the same way as Singapore did. Really thank you to our government.”
Darmawan, who also heads Indonesia’s largest bitcoin exchange Bitcoin.co.id and was a key participant in the discussions, said he also plans to introduce the country’s first bitcoin ATM soon and hopes the government’s clarification would make bitcoin investors more comfortable about reaching out to local startups.
Despite a population of over 240 million and membership in the G20 group of world’s major economies, Indonesia’s bitcoin scene is relatively small.
A clear hands-off approach could see it grow soon, reaching out first to a young and technology-friendly public in large cities like Jakarta, and then possibly to millions of unbanked and under-banked people in regional locales.
You Can Now Pay Cash For Bitcoin at 28,000 UK Stores
Bitcoiners can now pay cash for bitcoins at 28,000 shops across the UK, thanks to a new service set up by ZipZap.
The service enables people to head to their nearest ZipZap payment location, hand over cash and see bitcoins deposited in their wallets almost instantly.
Currently available via Bittylicious, BuyBitcoin.sg and BIPS Market, the service will go live with ANXBTC and ANXPRO next week, followed by Kraken, CoinMKT and BTCX.se.
Customers simply have to log into their accounts with one of these companies and select the cash payment option, they then choose the amount of bitcoins they want to purchase and head to their local ZipZap payment location to complete the transaction.
Thousands of independent local shops are registered as ZipZap locations, as are Spar, Asda, Tesco Express branches and many other stores across the country.
The minimum a user can choose to spend is £10 and the maximum per transaction is £300, but up to four transactions can be completed per customer, per day.
Lasse Birk Olesen, founder and CEO of BuyBitcoin.sg, said: “We are very excited to present the easiest and fastest way to buy bitcoins in United Kingdom! This is a key piece of infrastructure that allows bitcoin to grow further in the UK.”
He went on to say that, after a customer pays in cash, their bitcoins are delivered “within minutes”, adding:
“No more waiting for days for bank transfers – this is as fast as it gets and makes bitcoin more attractive.”
Marc Warne, CEO of Bittylicious, is equally excited by the new service he is able to offer his customers.
“This is a really neat way for people in the UK to get their hands on bitcoins,” he said.
Testing the service
I tested out the service using Bittylicious. I have to admit, I was a bit sceptical at first – why would I bother going through the effort of visiting a shop to buy bitcoins when I could do it all online? However, I found the whole process incredibly simple, and I can see why some people would prefer it and would enjoy the novelty of handing over physical cash for digital currency.
While Bittylicious currently enables unregistered users to buy small amounts of bitcoins via bank transfer and Barclays Pingit, it doesn’t allow them to use the cash payment service. This means you have to register with the company and submit identity documents (to comply with anti-money-laundering and know-your-customer rules).
Warne told me ID verification on Bittylicious currently takes 12 hours, on average, but the company is working on reducing this over the course of the next few days.
I’m already registered and verified with Bittylicious, so I just logged in, then the home page displayed the “Cash Payment” option.
After entering my bitcoin wallet address and selecting the amount in BTC or GBP I wanted to purchase, I was told I had 30 minutes to choose my payment location and confirm the trade.
I entered my postcode to find my nearest ZipZap payment location and found there were 13 shops for me to choose from within a radius of around 0.6 miles (bear in mind the CoinDesk office is in central London).
After selecting my most convenient shop, I hit the “I am ready to pay” button and was provided with a PDF document to print. This features all the order details, the address and a map of my chosen payment centre, plus the barcode required by the shopkeeper.
Bittylicious gives you a leisurely two hours to complete the payment and the PDF payment slip details the time by which the transaction must be finalised.
Once in the shop, I handed over the payment slip to the newsagent, he scanned the barcode, I handed over the cash, he printed a receipt and that was that. (You don’t actually have to print the payment slip – you can just bring the barcode up on your smartphone and have the shopkeeper scan it straight from there.)
Precisely eight minutes later, the BTC arrived in my bitcoin wallet.
Being able to pay cash over the counter for bitcoin was pretty cool – experiencing the ultimate transition from old money to new money. But aside from that, I’m not entirely sure what the major benefits are for someone like me, who has a bank account and can use a fast bank transfer to receive their bitcoins quickly and easily, without having to venture into the great outdoors.
It’s also worth bearing in mind you pay a premium to use this service. At the time of writing, the exchange rate displayed on Bittylicious for cash payments was £537.80 per bitcoin, which is quite a bit higher than the £520 per bitcoin if paying via bank transfer, and greater still than the £517.18 displayed on the CoinDesk Bitcoin Price Index at the time.
Some say they are attracted to the service as it allows consumers to remain anonymous, because their bank accounts aren’t involved. However, given that the service can’t be used without first registering with one of the bitcoin companies listed above, customers don’t actually remain completely anonymous.
Warne said that, regardless, the service will appeal to those who want to buy bitcoins without involving their bank in any way.
He said: ”It’s not really about getting bitcoins anonymously. It’s more about getting them without needing to rely on any other institutions.”
“Some people don’t have bank accounts, have unsuitable bank accounts or simply don’t want to associate their bank account with bitcoins, so this is perfect for them.”
According to research by Social Finance, more than 1.5 million adults in the UK are unbanked (do not have access to a transactional bank account), so I can see that there is a sector of society that would find this service extremely useful.
If/when it becomes available in countries where the majority of the population is unbanked, I can see the service really starting to take off.
Currently the barcodes featured on the payment slips are single use only, however, ZipZap is working on creating a system that will produce a reusable barcode. This will enable customers to ‘top up’ their bitcoin wallet with funds without having to go online each time to confirm their payment.
“A lot of people are put off investing in or purchasing bitcoin as they see the process as too complicated. ZipZap aims to change this, making it easier and faster for people to swap their money for bitcoins,” said Eric Benz, VP of business development at ZipZap.
He went on to say his company aims to roll out the cash-for-bitcoins service globally, though ZipZap wouldn’t confirm which territories will be next, or when.
The company is also looking to expand its service so that people can exchange their funds the other way around, swapping their bitcoins for cash over the counter.
As for developments set to take place specifically here in the UK, Warne (of Bittylicious) hinted that the service could soon also be available for altcoins, such as litecoin and peercoin.
“Although not available yet, there’s no reason why the altcoins on Bittylicious shouldn’t be available for cash too in the near future,” he explained.
What do you make of the cash-for-bitcoins service? Would you use it? Let us know in the comments.
Apple Removes Blockchain Bitcoin Wallet Apps from its App Stores
Apple has removed the Blockchain wallet app from its iOS App Stores, leaving iPhone and iPad users with no native bitcoin wallet options for their devices.
Apple offered no explanation for the action and no option to appeal, other than saying the removal was due to “an unresolved issue”.
The Cupertino company’s move did not come as a complete surprise, as Apple had previously banned bitcoin wallet apps Coinbase and CoinJar, and insisted encrypted messaging app Gliphremove an option that allowed users to send bitcoin.
Blockchain had been available on the iOS App Store for over two years, and had been downloaded more than 120,000 times. Its native app for desktops was also removed from the Mac App store, though the slightly more open nature of OS X means users may still download and install this version from non-Apple sources.
Blockchain was scathing in its criticism of Apple’s decision, posting the following statement on its blog:
“These actions by Apple once again demonstrate the anti-competitive and capricious nature of the App Store policies that are clearly focused on preserving Apple’s monopoly on payments rather than based on any consideration of the needs and desires of their users.”
“[The app] had no customer complaints, and a broad user base. The only thing that has changed is that bitcoin has become competitive to Apple’s own payment system. By removing the Blockchain app, the only bitcoin wallet application on the App store, Apple has eliminated competition using their monopolistic position in the market in a heavy handed manner.”
After its removal of bitcoin wallet apps from its App Stores for often vague reasons, others have also questioned whether Apple might be trying to enter the mobile payment space itself, where bitcoin wallet apps would become its competition.
Even Coinbase, one of the most popular bitcoin payment processors in the US, had its iOS app blacklisted just three weeks after it launched.
Users who previously downloaded bitcoin wallet apps may continue to use them, though updates are not possible and a device reset would see the apps gone forever.
The company and team behind the Blockchain app, also called Blockchain, was a one-man operation started by British developer Ben Reeves until the summer of 2013 when the team expanded to accommodate bitcoin’s popularity boom. Reeves built the site Blockchain.info initially as an academic research tool to explore bitcoin’s public ledger and the secrets it divulged about the curious workings of the bitcoin economy. Since then it has become the most regularly referenced site for anyone examining strange transactions, alleged crime, mistakes, and other obscure anomalies.
Sometimes called “The Google of bitcoin”, Blockchain’s team now consists of over eight people spread around the world on at least three different continents. Its wallet service also grew from humble beginnings as a side project into the world’s most popular ‘web-assisted’ bitcoin storage option, going from 500,000 accounts at the beginning of November 2013 to over a million by the end of the year. The company intends to spin the wallet side of things into a separate commercial entity called Blockchain.com.
After Coinbase’s own iOS App Store demise, Blockchain was the only native bitcoin wallet app available to Apple mobile device users. Its interface was more limited compared to its Android counterpart, possibly due to fears that updates would need to be scrutinized by Apple’s approval team and risk a ban. In the end, it seems, Apple decided not to wait.
Bitcoiners abandoning Apple?
Apple’s move could see a greater exodus of its bitcoin-using fans away from iOS and towards Google’s Android platform, which has several wallet options that continue to be developed and updated to meet bitcoin’s increasing popularity.
Kyle Drake, lead developer at Coinpunk.com, is working on a mobile app to run in a browser, eliminating Apple’s ability to block it via an App Store ban. Upon hearing the news of Blockchain’s fate he issued his own call to action:
“Bitcoin users, we need your help. We need you to take a stand against Apple, make noise, complain and show Apple that there will be consequences to their actions.”
Blockchain’s statement continued to question whether Apple was any longer on the side of the rebels and innovators it once claimed as its base.
“The decision attacks a nascent and innovative technology that is empowering more than 2.5 million users on a vast variety of computing devices, around the world by giving them unfettered and complete control over their money, while disrupting centralized payment systems controlled by corporate behemoths.”
“Unlike Apple, Google has accepted hundreds of bitcoin-related applications even though they also compete against the company’s own payment system ‘Google Wallet’.”
“Bitcoin is a revolutionary new peer-to-peer currency and payment system that is empowering millions around the world, especially the unbanked and underbanked who can use it to gain access to international banking facilities with nothing more than a smartphone.”
“Bitcoin’s use for international payments from family members sending money home to support entire communities in the developing world and for charity fundraising and fund distribution will be severely affected by this decision. As of Wednesday, bitcoin is no longer available to those using iOS devices, once again leaving them to the mercy of oppressive currency controls and governments in some of the worst regimes in the world.”
There is also an active petition on Change.org to allow bitcoin wallets to run natively on iOS devices, though whether it would elicit any official response from the notoriously silent Apple is doubtful.
Kazakhstan Central Bank Could Ban Bitcoin to Protect Bankers
Kazakhstan’s Central Bank Governor, Kairat Kelimbetov, has indicated in public comments that the National Bank of Kazakhstan could move to classify bitcoin as a ponzi scheme this year.
The remarks were issued on 4th February at a press conference, according to Tengrinews.kz, an English-language news site based in Kazakhstan.
There, Kelimbetov suggested that the Finance Ministry of Kazakhstan is studying bitcoin, but has yet to determine a formal stance on the virtual currency.
“The issue is rather complicated. Some claim the currency is a good tool of money laundering and an absolute evil. That’s why some monetary authorities, like those in China, have banned bitcoin,” Kelimbetov said.
Kelimbetov cautioned that a decision on the legal status of bitcoin has not yet been made, but that one was likely to be issued this year.
Protecting the country’s banking system
Perhaps more interesting are previous comments made by Kazakhstan’s vice minister of finance Ruslan Dalenov this December, who noted that any actions against bitcoin could be a move to protect domestic banks. Dalenov has revealed in previous statements that money laundering is not a concern with bitcoin.
“There is a cheaper and clearer means – cash. This is where we should start our fight,” Dalenov said.
Dalenov has also stated that should bitcoin adoption increase, there would not be any work for bankers, suggesting that the move has more to do with job protection in the country than bitcoin’s violation of any existing laws.
A regional consensus grows
The announcement notably comes on the heels of similar comments made by the Estonian Central Bank on 31 January, which issued a warning to its citizens that bitcoin may be a ponzi scheme that could put citizens and their wealth at risk.
Like Estonia, Kazakhstan shares a border with Russia. As a result, it may not be surprising that both comments came just days after Russia suggested that its bitcoin users could be breaking the law.
However, as highlighted by yesterday’s statements from Kazakhstan, the region is still working out the issues. Some high-level bankers in Russia, for instance,have issued pleas to allow bitcoin innovation to continue.
For more information on the legal status of bitcoin activities in Kazkhstan, click here.
BTC-e Downplays Concerns of New Russian Criminal Investigation
The eighth largest bitcoin exchange by volume, BTC-e is now “under investigation” by the Prosecutor’s Office of the Volgograd region in Russia.
English translations of the press release issued on behalf of the office suggest that the agency is initiating a criminal case against the exchange and its online resources.
Speaking to CoinDesk, representatives from BTC-e denied any wrongdoing and reiterated that they are not worried about any potential actions by Russian authorities. However, BTC-e did move to increase fees on USD, RUR and EUR transactions following the announcement.
Law enforcement officials are specifically looking to block the BTC-e website in Russia, under a new law that allows it to shut down websites that are associated with terrorism or other types of potentially dangerous extremism.
Russian authorities suggest that BTC-e is being investigated for the laundering of criminal funds as well as fraud. Notably, the comments come one week after the Bank of Russia announced that issuing alternative currencies in the Russian Federation is prohibited.
BTC-e representatives were confident that Russia’s actions will not be detrimental to their operations. A spokesperson implied that BTC-e faces little risk, as it does not have any offices in Russia or work with any Russian banks. Its founders Aleksey and Alexander, while residents of Russia, are not citizens.
The often-perceived secrecy with which it conducts operations could even bring some comfort to the organization. As noted in our 11th December report on the exchange:
“BTC-e is anything but transparent: it uses third-party banking services to keep its name out of official records. At least one of the banks involved in the process is located in the Czech Republic; the BTC-e site references Bulgaria in its SEO descriptions; the founders, Russian programmers Aleksey and Alexander, honed their skills at the Skolkovo tech park; and the BTC-e managing company is based in Cyprus.”
Trading volumes on BTC-e remained unaffected by the news as evidenced by the stable prices on the exchange at press time, coupled with open talk of the actions on the website’s central forum.
When asked whether the actions would restrict the ability of the exchange to handle new Russian deposits, the organization said only that this would “depend on the laws that will take in Russia”.
Furthermore, a nationwide ban, while potentially prohibiting new participants from accessing the exchange, would likely not be able to deter BTC-e’s use by its existing base. BTC-e users could still rely on the anonymous TOR network or utilize VPNs to conduct transactions.
In addition, service interruptions are certainly not unknown to site users. Last December, BTC-e reported banking issues due to updates of their service architecture that would likely affect users until January.
US Postal Service Explores Adding Bitcoin Exchanges
While the New York Department of Financial Services (NYDFS) successfully monopolized media attention last week by assembling a cast of bitcoin A-listers at its regulatory hearing, it wasn’t the only government agency to explore virtual currencies in a way that could impact the global community.
Topics included whether post offices could leverage their physical locations to act as in-person bitcoin exchanges and if they could color coins as a way to underpin bitcoin’s value and increase adoption.
Darrell Duane, a Washington, DC-based bitcoin consultant who was initially approached by the USPS and later helped promote the event, said that though much of the material was educational, there were some suggestions that, if adopted, could have big implications for the bitcoin community.
“There were suggestions like if someone made ‘postcoin’, ‘What would that be?’ ‘How could that help?’ If we were to employ the technology to support post office operations around the world, internationally, how could cryptocurrency help post offices do their business?” Duane said.
Experts from the Federal Reserve Bank of Chicago, Booz Allen Hamilton, George Mason University and the Bitcoin Foundation were on hand to speak about bitcoin, its use cases and its implications for the wider economy as part of the two-and-a-half-hour meeting.
Bitcoin’s role for postal operators
With much of the first part of the day’s discussion devoted to the introductory aspects of bitcoin, the latter half more directly addressed how virtual currency could revolutionize post office operations.
Christian Jaag, managing partner at Swiss Economics, began this section of the event by naming certain characteristics of bitcoin that he believed would be of a particular interest to the discussion: These included bitcoin’s algorithmic money creation, decentralized ledger, peer-to-peer nature and sometimes volatile exchange rate.
“There’s a great challenge to postal operators lately, postal volumes are decreasing, people do not go to post offices as often as they used to. However, postal operators have to maintain their networks, they have to look for new ways to fill their offices up and one potential contact point is the exchange of virtual currencies to other currencies,” Jaag said.
Jaag suggested that post offices would be able to use their existing money transmitter licenses to facilitate these exchanges, gain a greater level of involvement in e-commerce and attract increased revenue.
Introducing a ‘postcoin’
Jaag went on to discuss how colored bitcoins could benefit post offices, theorizing that, with their global network and strong reputation, postal providers could mark existing bitcoins as a way to provide a safeguard against wealth loss and incentivize virtual currency adoption.
“You can take one bitcoin and declare it to represent your monetary base of postcoin, and you can then issue fractions of bitcoins freely and back it by something else,” Jaag stated.
Jaag said this would allow a postcoin to become a full reserve currency used by postal operators. Post offices would, in turn, be able to make transactions with its coins reversible, as well as facilitate the trade of bitcoin and other local currencies.
“There’s no need for institution, but there is a role for institution,” Jaag said in summary.
Impact on international e-commerce
Following Jaag, José Anson, an economist at UPU International Bureau, spoke about bitcoin’s potential to act as a “form of trade facilitation”, bringing online transactions under the supervision of post offices and allowing for a synchronization of activities through the protocol’s ability to validate contracts.
“There is a possibility of synchronizing a number of activities that could foster much more trust in international trade and international financial exchanges,” Anson said.
Under this system, international e-commerce transactions would be “simplified” by a merging of activities that would find postal services verifying the security of deliveries, confirming transactions and facilitating more cost-effective payments between parties.
“It goes beyond payment and financial, it’s a matter of trade inclusion for many small entrepreneurs around the world and integrating all these parties into the world trading system,” Anson stated.
One option of many
While interesting to those in the virtual currency space, the news notably comes roughly a week after the OIG published a white paper addressing how it could better extend its services to those who don’t have access to traditional bank accounts and financial services.
That paper explored whether the USPS would benefit from issuing prepaid cards, payday loans, international money transfers and mobile banking options, among other programs. Researchers cited the fact that 90% of underbanked US consumers now have a mobile phone as a compelling reason for mobile banking’s consideration.
Though it did not mention bitcoin specifically, the paper’s stated goals will doubtless be familiar to the bitcoin community as compelling reasons for its use:
“A suite of non-bank financial services offered through the Postal Service – available online, through mobile devices and at Post Offices in every community – could greatly benefit families everywhere. Postal financial services could help American families to save money through avoiding exorbitant fees and interest,” the report read.
Further driving the need to explore additional revenue streams is the erosion of the USPS’ core business as a result of rising Internet use. Letter writing has declined by 25% since 2010, while the majority – 56% of bills – are now paid electronically.
However, any further action on virtual currency is likely to take time. According to one inside source, speaking to Bloomberg, the implementation of virtual currency services could be “years” away for the USPS.
Senator: Government Report Shows US Not Lagging on Bitcoin
Bitcoin advocates may lambast the US government for being slow to clarify its position on bitcoin, but Senator Tom Carper doesn’t think it’s all that bad. The chair of the Senate Homeland Security and Governmental Affairs Committee released a report today exploring the legal status of virtual currencies in 40 countries. The findings? Most countries are still fumbling their way towards clarity, if they’re bothering at all.
“This report has some good news – namely that the United States may not be as far behind the curve on virtual currencies as some have argued,” Carper said. “In fact, the United States might be leading the way for a number of nations when it comes to addressing this growing technology.”
One notable thing stands out about the report, written by the Law Library of Congress. That there are a lot of governments that haven’t regulated bitcoin yet, but who are nevertheless grumbling about it. These include France, the EU, and Estonia.
The Dutch National Bank, Turkey, and Taiwan have warned of the risks associated with virtual currencies, and Portugal, while also keeping its hands off of bitcoin, nevertheless called digital currencies in this class “unsafe”.
“The United States may not be as far behind the curve on virtual currencies as some have argued”
The Russian Federation said that there may be a need to regulate virtual currencies globally in the near future. But perhaps the strongest warning came from India, which while not explicitly regulating bitcoin made an official anti-virtual currency statement strongly-worded enough that it caused the country’s biggest exchange to shut down.
The report lists each country’s current stance on bitcoin, but these break down into three broad categories: those who are actively regulating virtual currencies, those who have declared, officially or unofficially, an interest in taxing it, and those who haven’t issued any regulation or tax guidance yet.
Among those actively regulating digital currencies, according to the report, are Brazil, and China, the latter which stopped financial institutions buying, selling, or pricing services in bitcoin, and from providing bitcoin-related services.
Iceland forbids bitcoin from being traded in foreign exchange. Thailand was said to have issued a statement saying that bitcoin was illegal, the report suggests, but adds that the ruling was preliminary, and that bitcoin exchanges there are running.
Those not actively regulating or forbidding bitcoin use, but who are nevertheless moving in the direction of taxation, include Australia, which is warning people to keep good records, and Canada, which has said that bitcoin is subject to the same taxation rules as bartered goods.
Other countries at various stages along the tax route include Finland, Israel (which wants to tax it, but isn’t sure how yet), and now Singapore, says the report.
Slovenia will tax bitcoin on a per-case basis, depending on the type of income, and the UK recently issued a note saying that bitcoin would be treated as single-purpose vouchers, meaning a value-added tax of 10-20%, the report said.
Waiting and seeing
Then, there are the countries that have next-to-no position on bitcoin. Notable among these are Germany, the EU’s major economic engine, which sees virtual currencies as legally binding financial instruments known as units of account that don’t need licensing, the report says. Germany makes bitcoin-based capital gains exempt after a year.
Italy doesn’t regulate virtual currencies for individual use, but the use of electronic currency is limited to institutions registered with the central bank there.
Argentina doesn’t recognize the currency as legal tender, but the report points out that the country’s citizenry are using it anyway, to get around controls on foreign currencies.
Others that have taken little-to-no action on bitcoin yet include Japan, Malaysia, Malta, Netherlands, New Zealand, Nicaragua, Poland, Portugal, Russia, and Spain. South Korea is also keeping its powder dry on regulation, but may impose laws on virtual currencies in the future, the report added.
Carper may be bullish about the USA’s global positioning on bitcoin regulation, but that still doesn’t explain why the top eight exchanges by volume are non-domestic. Only Kraken makes it onto the chart.
And then, there’s the tax issue, which is particularly important for encouraging bitcoin adoption by businesses. Carper acknowledges the need for work here, acknowledging that the IRS has not yet delivered clear guidance.
“This report shows that other countries have addressed how virtual currencies are taxed, and I urge the Internal Revenue to glean the findings from this survey to help determine its own treatment of virtual currencies,” he said.
“Our Committee will also continue to work closely with the Internal Revenue Service to get greater clarity as to their timelines and thought processes on dealing with the potential tax vulnerabilities of digital currencies,” Carper added.
200,000 Hotels Now Accept Bitcoin Through Online Travel Agency CheapAir
California-based travel agency CheapAir.com has announced that it is expanding its service to allow bitcoin users to book hotel stays with the cryptocurrency.
CheapAir has been accepting bitcoin for flight bookings since Novemberwhen it partnered with Coinbase, however until today, users have not been able to pay in bitcoin for its extensive hotel inventory.
Speaking to CoinDesk, CEO and founder Jeff Klee voiced his enthusiasm for becoming the “first company in the US” to allow bitcoin users to book hotel stays with the virtual currency:
“Bitcoin gets a bad rap in mainstream media. What I found is that the people who use bitcoin are great, they’re passionate and they’re looking to solve a lot of the problems inherent in the economic system and the world.”
The news garnered a largely positive reaction on reddit and the BitcoinTalk forum, with ambitious bitcoin users even suggesting they would pass the news along to other travel companies that have expressed a cautious interest in bitcoin.
“For it to become a really big part of our business, bitcoin itself needs to grow. We think it will.”
Klee indicates that the decision to expand its program to include hotels was due to a “better than anticipated” response from the community after it began accepting bitcoin payment for flights.
“We had no idea what to expect, however, it generated a nice enthusiasm,” Klee recounts.
Klee did not share specific numbers, but did say that bitcoin customers are more likely to become loyal than traditional customers, and that his company receives “a nice volume of emails from bitcoin customers”. Still, despite these benefits, he won’t call bitcoin a game-changer for CheapAir just yet, though he thinks CheapAir’s position could change as the currency gains more loyal users.
How CheapAir pays hotels
For CheapAir, paying hotels and flight providers is still a challenge, but one they find worthwhile given the currency’s dedicated customers and engaged base. Klee noted that in order to process transactions, CheapAir must accept the bitcoin and exchange it for fiat currency before paying hotels. This means certain hotels, those that require patrons to pay at checkout, will still be off limits to bitcoin customers.
Klee notes that “once in a while you’ll see a hotel on our site that won’t have a bitcoin logo by it”, but that the majority of properties on the site will see the bitcoin logo clearly displayed on its listings.
CheapAir’s next stop
Klee noted that CheapAir is not specifically seeking out partnerships with the bitcoin-accepting hotels that are increasingly popping up near major destinations. But, the CEO didn’t exactly close the door on the possibility, noting “We’re open to anything”. He did mention, though, that this could mean eventually broadening its bitcoin acceptance yet again.
Klee suggested that CheapAir is looking to add cruises to its catalog of hotels and flights, but that the company is “pretty far away” from implementing these new offerings at present.
A Singapore company is planning to install the island’s first bitcoin ATM by April.
The firm, Bitcoin Exchange, has purchased a Lamassu unit that it expects will arrive mid-March. It plans to install more ATMs if the first unit is well received. Zann Kwan, one of the company’s directors, said:
“The good thing is that the Singapore government has left bitcoin alone. It’s treated like silver or gold, and if you want to [deal in it] it’s at your own risk. The ATM will create a lot more interest in bitcoin.”
According to Kwan, the machine’s location hasn’t been decided just yet. The company is looking for a location inside one of Singapore’s many shopping malls.
Kwan made it clear that the ATM would not charge a fee for each transaction, supplying bitcoin at a premium to market rates instead. She said the company had not decided what exchange it would take its rates from yet.
The Singapore bitcoin economy has been growing, although it’s still mainly driven by early adopters, she added:
“There are a few bars that are accepting bitcoins now, and people are talking about it. But you need a few people to start the ball rolling, then the momentum will pick up.”
One of the republic’s cryptocurrency-accepting bars is Bartini Kitchen. The cocktail bar and restaurant, located in the heart of the city’s financial district, beganaccepting bitcoin payments at the end of November.
Several customers have paid for their food and drinks from Bartini Kitchen’s modern European menu in bitcoin since then, according to bartender Amir. He said:
“There’ve been just a few transactions, not many of our customers know about bitcoin. But overall, it’s been a positive response.”
Bartini Kitchen draws a cosmopolitan after-work crowd from the office towers that dominate the skyline in this part of town. The restaurant is part of a group of seven other bars and eateries, including a Japanese restaurant called Mariko’sthat also takes bitcoin.
According to Amir, the group’s management are keen bitcoin supporters. Bartini’s mixologists are led by Barnaby Murdoch, a British expat who mixed drinks at London nightspots Kitts, Rudy’s Revenge and Rubicon.
Singapore’s tax authority issued guidelines on how to tax bitcoin back in December, becoming one of the world’s first regulatory institutions to do so. The republic is also the base of digital currency startups, like payment processorGoCoin and Ripple Singapore, a bullion exchange using the Ripple network.