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Bitcoins Join Global Bank Network

timothy posted about 2 years ago | from the now-you're-totally-untraceable dept.

Bitcoin 84

another random user writes "Bitcoin-Central, a currency exchange that specialises in virtual cash, has won the right to operate as a bank. They got the go-ahead thanks to a deal with French financial firms Aqoba and Credit Mutuel. The exchange is one of many that swaps bitcoins, computer generated cash, for real world currencies. The change in status makes it easier to use bitcoins and bestows national protections on balances held at the exchange. Under European laws, the deal means Bitcoin-Central becomes a Payment Services Provider (PSP) that has an International Bank ID number. This puts it on an equal footing with other payment networks such as PayPal and WorldPay. As a PSP it will be able to issue debit cards, carry out real-time transfers to other banks and accept transfers into its own coffers."

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As we speak... (4, Funny)

Joce640k (829181) | about 2 years ago | (#42224289)

The NSA are digging their tunnels underneath the bank's head office as we speak.

Re:As we speak... (0)

AdamRich (2790901) | about 2 years ago | (#42224297)

The funny thing is we even have a story like this. It even says right in the summary that even PayPal was such provider first. Yet we are discussing the under-player just because it's bitcoin. Jeez.

Re:As we speak... (1)

Anonymous Coward | about 2 years ago | (#42224323)

You realize "one bitcoin exchange" != "bitcoin", right?

Re:As we speak... (3, Insightful)

jythie (914043) | about 2 years ago | (#42225427)

It is still a significant milestone since it creates a new class of interface between state currencies and bitcoin, so in a way it impacts the whole bitcoin ecosystem.

Re:As we speak... (0)

Anonymous Coward | about 2 years ago | (#42224373)

Its slashdot after all.

Re:As we speak... (1)

cvtan (752695) | about 2 years ago | (#42224503)

Paypal doesn't create its own currency. There are no "PalBucks". This is just baffling.

Re:As we speak... (1)

neokushan (932374) | about 2 years ago | (#42224779)

This doesn't create its own currency, either?

Re:As we speak... (0)

Anonymous Coward | about 2 years ago | (#42224861)

It should have been phrased as "paypal doesn't use its own virtual currency".

Re:As we speak... (1)

Sulphur (1548251) | about 2 years ago | (#42228987)

Paypal doesn't create its own currency. There are no "PalBucks". This is just baffling.

One word overdrafts.

Re:As we speak... (0)

Anonymous Coward | about 2 years ago | (#42229563)

Paypal doesn't create its own currency. There are no "PalBucks". This is just baffling.

One word overdrafts.

second word, inflation?

bitcoin is not pegged to the inflation of any national currency. Paypal overdraft is, it's beholden to the inflation for the currency of choice.

Re:As we speak... (0)

Anonymous Coward | about 2 years ago | (#42226099)

Why would they bother? You need your real name to open an account, and the transaction logs are completely public.

MMM !! THE SMELL OF FRESHLY LAUNDERED MONEY !! (0)

Anonymous Coward | about 2 years ago | (#42224301)

The russian mobs are ecstatic !! CRYING !! We Own Your Money Now !!

Re:MMM !! THE SMELL OF FRESHLY LAUNDERED MONEY !! (0)

Anonymous Coward | about 2 years ago | (#42224769)

The russian mobs are ecstatic !! CRYING !! We Own Your Money Now !!

I can only image the racket that all those bitcoins will make as they tumble around in the laundry. One more thing to dislike about bitcoins.

Re:MMM !! THE SMELL OF FRESHLY LAUNDERED MONEY !! (0)

Anonymous Coward | about 2 years ago | (#42225261)

So what you dislike about Bitcoins is that they could undermine the pervasiveness of government surveillance?

PayPal is not a bank (2, Informative)

Anonymous Coward | about 2 years ago | (#42224365)

...It is a soul-less monster.

Re:PayPal is not a bank (5, Insightful)

Anonymous Coward | about 2 years ago | (#42224391)

...It is a soul-less monster.

...there's a difference?

Re:PayPal is not a bank (5, Funny)

jbeaupre (752124) | about 2 years ago | (#42224445)

Yes. Banks have souls. Many, many souls. Usually sold to them for a new car, nice house, pretty girl, etc. You know, the usual.

With relaxed lending rules, you don't even have to sign in blood anymore.

Re:PayPal is not a bank (4, Funny)

kenj0418 (230916) | about 2 years ago | (#42224537)

[souls] sold to them for a ... pretty girl

What - you can buy those with a soul? Darn it! Why did I have to be born without one. Curse my ginger genes!

Re:PayPal is not a bank (-1)

Anonymous Coward | about 2 years ago | (#42225329)

When I was in banking, our motto was: "Its not just the principle, but the interest that counts". After a few years, I lost all interest. I'm a slow learner.

Re:PayPal is not a bank (1)

Alwin Henseler (640539) | about 2 years ago | (#42224447)

There are soul-less monsters that are subject to banking laws, and there are soul-less monsters that are not subject to banking laws.

Given a choice, I prefer the first as it's the lesser of evils.

Re:PayPal is not a bank (0)

Anonymous Coward | about 2 years ago | (#42224759)

Considering that the soulless monsters subject to those banking laws tend to NOT follow them (Several come to mind that don't follow the Check 21 modifications for Regulation CC like they're supposed to... Cash deposits made to an ATM on any given day the branch is open to 9 pm are to be immediately available if the system is an envelopeless system that knows it's had Cash deposited to it. At least one of the big players doesn't do this and then tell you that they're abiding by the regulation on their ATMs and elsewhere- but the deposits often show "pending" and they typically opt to gig you for an NSF if you rely on the money being available like it should be per the regulation.)- there's not much of a difference other than you have good standing to sue the crap out of them over some of their bullshit. Typically in a class-action suit, like you're seeing with most of the major banks with the games they played with overdraft fees due to check presentation orders and deposits being held mysteriously in violation of Regulation CC.

Re:PayPal is not a bank (1)

jythie (914043) | about 2 years ago | (#42225445)

Even when rules are routinely ignored and lawsuits difficult to put together, at least it represents a possible path. With bitcoin, if someone misbehaves, your best bet is paying off the mafia to track down the person and string them up.

Re:PayPal is not a bank (0)

Anonymous Coward | about 2 years ago | (#42224739)

...there's a difference?

I give you Sully from Monsters, Inc.

Re:PayPal is not a bank (0)

kestasjk (933987) | about 2 years ago | (#42224419)

It's just a payment service.. I've used it 3 times in the last two weeks, dozens of times over the last year.

Actually, it's not really a bitcoin bank (5, Informative)

maxwell demon (590494) | about 2 years ago | (#42224389)

"However, he said, this protection only applied to balances held in euros rather than bitcoins."

So either you have an Euro account which is treated as a real bank account, or you get a Bitcoin account and are outside those regulations.
In other words, they now have an Euro bank and a Bitcoin exchange combined in the same company, but not a Bitcoin bank.

Re:Actually, it's not really a bitcoin bank (1)

sturle (1165695) | about 2 years ago | (#42224467)

They don't claim to be a Bitcoin bank.

Re:Actually, it's not really a bitcoin bank (5, Informative)

maxwell demon (590494) | about 2 years ago | (#42224513)

They don't claim to be a Bitcoin bank.

But the story title does.

Re:Actually, it's not really a bitcoin bank (5, Funny)

Razgorov Prikazka (1699498) | about 2 years ago | (#42224599)

t+0.1 seconds: fucking hell, not ANOTHER bitcoinstory
t+1.3 seconds: (after reading the title) Hmmm... this might actually be interesting
t+1minute: (after reading the summary) this is actually cool, a bitcoin bank!
t+3minutes: (after reading the above)... actually it's not that cool at all :-(
t+5minutes: (after replying) I feel like I should get a life...

Re:Actually, it's not really a bitcoin bank (1)

sturle (1165695) | about 2 years ago | (#42224747)

They don't claim to be a Bitcoin bank.

But the story title does.

My title says "Bitcoins Join Global Bank Network", which is only half true. You can transfer Bitcoin to your Bitcoin address, and have it set up to convert them to Euro on your bank account instantly as they arrive, and this bank account is joined with the global bank network. Bitcoin can not travel through the global clearing systems banks use for fiat money and arrive at another bank as Bitcoin on a bank account. Bitcoin-Central is now an European Payment Services Provider which exchange Bitcoin as well as handle fiat money like a bank normally does. Not a Bitcoin bank and not even a bank by the proper definition (it doesn't issue credit).

I'll switch to this bank (PSP for the nitpickers) for my daily banking until my old bank can handle Bitcoin in the same way.

Re:Actually, it's not really a bitcoin bank (1)

iroll (717924) | about 2 years ago | (#42226231)

I'll switch to this bank (PSP for the nitpickers) for my daily banking until my old bank can handle Bitcoin in the same way.

So, never?

Re:Actually, it's not really a bitcoin bank (1)

jythie (914043) | about 2 years ago | (#42225459)

True, and an important distention... still, having the two services in a single entity is something new and might indicate a trend. Though I would assume that in general states only protect accounts that are in their own currency... hrm.. now I wonder about that... would a bank holding US dollars in the EU have the same regulation and protection as one holding Euros?

Re:Actually, it's not really a bitcoin bank (0)

Anonymous Coward | about 2 years ago | (#42227141)

"However, he said, this protection only applied to balances held in euros rather than bitcoins."

I think you undersell them by misunderstanding how many want to use bitcoins in practice. This is still worth something for those using bitcoins to replace google checkout, paypal, or credit cards, because it makes it possible to form a payment network based on bitcoins. Everyone holds their balances in fiat currency, exchanges the purchase price into bitcoins, transfers them to the seller, who exchanges them for fiat currency. The buyer only posesses bitcoins for 1 - 30 minutes, the time it takes to do the exchange (it's not instant because you have to wait for people exchanging in the other direction). In this model only speculators will be holding balances in bitcoins, and risk-adverse people who want to avoid credit card cartels but don't want to worry about exchange rates or fraud will keep their long-term balance in Euros.

In b4... (0)

Anonymous Coward | about 2 years ago | (#42224395)

... ponzi scheme!

Re:In b4... (1)

Black Parrot (19622) | about 2 years ago | (#42226819)

... ponzi scheme!

For Ponzi schemes, "nb4" is indeed the correct strategy.

Not so fast (0)

trifish (826353) | about 2 years ago | (#42224409)

Ok but if I accept a donation in Bitcoin will US and EU law view it is donated money or thing other than money?

And if as money, then what is the official exchange rate to Euro, USD, or other convertible currency?

Those questions are actually critically important. How do you calculate gift tax if you don't know the real official value of the bitcoins?

Also, if it is not *real* money yet, you will be taxed twice (once you will need to ask an expert to assess the market value of the bitcoin and then pay gift tax on that donation). Then, later, if you want to sell bitcoins for USD or EUR, you will have to pay income tax on the money!

Re:Not so fast (4, Interesting)

jbeaupre (752124) | about 2 years ago | (#42224433)

I'm not an accountant or tax lawyer, so treat this with suspicion:

US tax law doesn't do much to distinguish between receiving cash and anything with a market value. If it's a gift, you pay the gift tax based on the cash value when you received the gift. If it was compensation for employment, you pay income tax. If it was for an investment, you pay capital gains rate. If it was reimbusement for a business expense, you don't pay tax. If it was for, well, you get the idea. It's not quite that simple, but for a Slashdot explanation, it'll do.

The good news is that you only pay one tax. You can estimate the value yourself. If you estimate too low, the IRS may come knocking. If you estimate too high, thank you for helping to fund our wonderful government with your kind donation.

Re:Not so fast (0)

Anonymous Coward | about 2 years ago | (#42226721)

You are very, very misinformed.

Gift tax is paid by the person GIVING the gift, not the recipient.

Re:Not so fast (1)

Rassah (2789619) | about 2 years ago | (#42228601)

Not in US. If that's the way it works in EU... that's f'ed up :P

Recipients Pay Tax (1)

andersh (229403) | about 2 years ago | (#42232679)

It's not the case in European countries, the gift recipient obviously pays the gift tax. I think the anonymous comment is entirely wrong.

The EU doesn't write tax laws as Europe doesn't have a "federal" tax. We're still individual nations and taxes are national and local.

Re:Not so fast (0)

Anonymous Coward | about 2 years ago | (#42235077)

Technically both the giver and receiver pay taxes in the U.S., and not always just once:

* Giver pays taxes on the money they earn.

* Giver pays additional taxes when they spend same earned money to buy gift (if non-monetary gift).

* Receiver pays taxes on receipt of gift.

* Taxes may be paid on gift again by 2nd recipient when original receiver dies (death tax)

Re:Not so fast (1)

jbeaupre (752124) | about 2 years ago | (#42237463)

True. But for the single transaction of gift giving, only one tax.

Re:Not so fast (0)

Anonymous Coward | about 2 years ago | (#42228293)

> If it's a gift, you pay the gift tax based on the cash value when you received the gift.

Donors, not recipients, pay gift tax.

Re:Not so fast (0)

Anonymous Coward | about 2 years ago | (#42235041)

Your post does not answer any of my questions. Posted as anon as I dont care about your reply.

Re:Not so fast (3, Interesting)

sturle (1165695) | about 2 years ago | (#42224465)

There is no official exchange rate from EUR to USD either. The only currencies operating with official exchange rates are IRN (Iran), KPW (North Korean won), and a few others. For those there is a black market using completely different rates.

If you check the currency rates from different banks, you will see they differ. Usually by very small amounts, because every time a robot discovers it can buy USD with EUR in one bank and sell in another at a profit, the market rates at both banks will even out. The same mechanism is at work in Bitcoin. Sometimes however, the bots run out of funds and the exchange rate stays sparated by a few percent.

As for taxation, I have reported my bitcoins and Bitcoin earnings to the tax authorities every year, and they still have no clue what to do about the information. Bitcoin is an undefined entity. All their calculations return undef, NaN, null or similar.

Re:Not so fast (0)

Anonymous Coward | about 2 years ago | (#42225303)

There IS an official exchange rate when it comes to declaring your Euro income to the American IRS. The IRS doesn't care what the actual market exchange rate is. Your tax in dollars is based on what THEY say the exchange rate is.

Re:Not so fast (1)

pjt33 (739471) | about 2 years ago | (#42232777)

There is a reference rate [ecb.int] which is "based on a regular daily concertation procedure between central banks across Europe and worldwide". That's what I used when I was earning GBP and paying income tax in EUR.

Re:Not so fast (1)

Xugumad (39311) | about 2 years ago | (#42224485)

As others have said, there is no official exchange rate. I've traded currencies (not very well, but I have), and have done UK tax returns based on the same. Unless there's a more applicable rate (as in, if you're trading at one rate, obviously you can't claim another), any consistent process for calculating the exchange rate can be used (so you can use the average of high/low from a Barclays as long as you always use that, you couldn't suddenly start using the high from another data source halfway through your calculations). Exchange rates can (and do) differ depending on which market you're trading on (although obviously the use of automated trading means inconsistencies last typically seconds at worst).

I am not qualified to give tax advice to others, so anyone depending on this should consult an actual professional. Tax laws will obviously also differ by country.

Re:Not so fast (0)

Anonymous Coward | about 2 years ago | (#42224805)

And if as money, then what is the official exchange rate to Euro, USD, or other convertible currency?

Well, there's a small tax, or rather, a 'fee' charged for the resources required to generate the exchange calculation. This fee cannot be paid in bitcoins.

PCI Compliance (0)

funkboy (71672) | about 2 years ago | (#42224423)

So it's just a matter of time until they can be audited for PCI compliance [wikipedia.org] then?

Well, passing such an audit would certainly lend legitimacy to Bitcoin, but I think they'd have a lot of hurdles to jump through before they got there...

Re:PCI Compliance (2)

IamTheRealMike (537420) | about 2 years ago | (#42224677)

PCI compliance is only for credit card payment processors. Bitcoin Central does not (as far as I know) accept deposits with credit cards because of the fraud risks from the completely insecure card-not-present payment system, so PCI compliance is irrelevant. Also, as far as I can tell it doesn't actually mean much beyond basic best practices like having firewalls, being up to date with the latest patches, encrypting card data at rest, having access controls etc. It's hardly a magic bullet.

Re:PCI Compliance (0)

Anonymous Coward | about 2 years ago | (#42225605)

Also, as far as I can tell it doesn't actually mean much beyond basic best practices like having firewalls, being up to date with the latest patches, encrypting card data at rest, having access controls etc.

You seem to be unfamiliar with the standard level of security in the brave new frontier of Bitcoin.
Are there even a handful of services that have lasted a year without a big security breach, excepting those who just shut down and took the money themselves?

Re:PCI Compliance (1)

IamTheRealMike (537420) | about 2 years ago | (#42225659)

Sure there are. MtGox was not breached since the "big one" (which was itself only a few thousand coins and the owner covered the loss from their profits, so it had no user impact). Quite a few other services just tick over making money without any drama. You don't hear about that, of course.

Re:PCI Compliance (0)

dbIII (701233) | about 2 years ago | (#42225021)

Only if it's old hardware, for newer stuff it's PCI express compliance.


On a more serious note, when are you guys going to wake up and see that this is just an old fashioned ponzi scam baited for geek and camoflaged with some handwaving in the direction of a cool bit of Cryptonomicon that was really describing something else? It's not going to pass any sort of compliance without some bribes or other sort of dodgy deal.

Re:PCI Compliance (1)

tqk (413719) | about 2 years ago | (#42225443)

On a more serious note, when are you guys going to wake up and see that this is just an old fashioned ponzi scam ...

Do you have a drop dead simple explanation that would prove that fact to all comers? Does anyone?

That's why this is still going on. Lots of people (not me) are out there playing with this stuff trying to determine if there's any "there" there. I enjoy the show, and think it would be a good thing if it pans out, but the jury's still out. Ponzi Scheme [wikipedia.org] is a fairly definitively defined concept. What's your proof that Bitcoin == Ponzi Scheme, and what exactly is it that proves to you that all those dabbling in it are fools?

Absent of that, you're just laughter from the peanut gallery.

Re:PCI Compliance (1)

osu-neko (2604) | about 2 years ago | (#42227941)

On a more serious note, when are you guys going to wake up and see that this is just an old fashioned ponzi scam...

Using "ponzi" to describe something that's not a ponzi scheme, even if it is a financial scam of some sort, just makes you look like an idiot who can't tell the difference between ponzi schemes and other kinds of scams.

Re:PCI Compliance (1)

dbIII (701233) | about 2 years ago | (#42230163)

To the pedant if the object with no material value used in the scam is not actually called a ponzi then it can be argued the it is not a ponzi scam. To everyone else, there is no requirement to more correctly call it a "ponzi-like scam" because they assume that everyone can work out the "like" bit themselves and that it doesn't really matter if it's not there.
So yes, I suppose to a pedant a lot of people are going to look like idiots.
Have you noticed that a "bitcoin" has no physical value in itself? That (and several other things, such as the deflationary progression for late adopters) puts it firmly within the realm of ponzi-like scams.

Re:PCI Compliance (0)

Anonymous Coward | about 2 years ago | (#42233625)

US dollars have no physical value in themselves. You clearly don't understand what Bitcoin is. It's not a good or a service.

Re:PCI Compliance (0)

Anonymous Coward | about 2 years ago | (#42244047)

So I can spew any falsehood that comes to mind and anyone who tries to correct me is a pedant? Idiot. The bitcoin is no more of a scheme than the dollar is.

Not A Ponzi Scheme (1)

DanielRavenNest (107550) | about 2 years ago | (#42229007)

The answer is "never" because it does not meet the definition of such a scheme.

Bitcoin does not take money from later investors to pay early investors, nor does it promise a high rate of return. It also does not have a promoter who takes a cut from investor funds. It also does not need to "pass any sort of compliance" because it is not a security. It is an accounting system, similar to what you can do with a spreadsheet, just distributed and cryptographically secured.

There is one global Bitcoin account book that records every transaction ever made, and which account numbers got how many arbitrary units credited (bitcoins or BTC). It takes work to verify transactions and secure the transaction history from tampering. That work is rewarded with fresh bitcoins for whoever finishes a chunk of work (block) first. That is similar to an accountant getting credited for work keeping a company's books by an entry to pay himself added to the books themselves.

Adding fresh bitcoins to the system this way is different than how the Federal Reserve creates dollars, but is no less valid. The Fed buys Treasury bonds and bad mortgages, and pays for them by crediting the seller with new dollars it magically creates, then backing those dollars with the bonds and mortgages it bought. If the Fed wanted to reduce the money supply, it would sell the assets it holds for dollars, and the dollars vanish back into thin air. Since these days all of that happens by computer between the Fed and private banks, the new dollars are merely data entries, just like bitcoins.

Re:PCI Compliance (4, Funny)

fa2k (881632) | about 2 years ago | (#42225047)

Better than that, Bitcoins generated on graphics cards have PCI Express compliance

A bank? (0)

Anonymous Coward | about 2 years ago | (#42224439)

The whole point of bitcoin was that the currency doesn't need a bank. And now we celebrate that ... we have a bitcoin-bank? So bitcoin has a bank, can have (will have?) fractional reserve banking, you can speculate on stocks, ... Seems like all the bad characteristics of traditional fiat-currencies are being ported to bitcoin.

Re:A bank? (1)

sturle (1165695) | about 2 years ago | (#42224477)

1. They do not claim to be a Bitcoin bank.
2. They do not claim to be a bank (just licensed to operate as one).
3. They are technically a PSP, which means they are not allowed to issue credit, i.e. increase the money supply.
4. Bitcoin banks are not impossible, just not necessary. You see the difference?

Re:A bank? (0)

Anonymous Coward | about 2 years ago | (#42224923)

"2. They do not claim to be a bank (just licensed to operate as one)."

    I do not claim to be an International assassin (just licenced to operate as one).
    Some call me Bond- James Bond. And we do not trade Bonds for Bitcoins.

Re:A bank? (0)

Anonymous Coward | about 2 years ago | (#42227777)

"2. They do not claim to be a bank (just licensed to operate as one)."

    I do not claim to be an International assassin (just licenced to operate as one).

    Some call me Bond- James Bond. And we do not trade Bonds for Bitcoins.

They do if you are one of the mining bond rip-offs that are operating.

My thought on value movements: (1)

robbak (775424) | about 2 years ago | (#42224475)

I would expect that it will rise on the news - it usually does - but this story broke a few days ago, and, yes, now I remember it, it did rise.

Medium term, though, it may well push it back down. Part of the price at the moment is because they are difficult to buy, so there is a premium. If it becomes easier, then the price may fall.

So, I predict temporary instability, on top of the usual long term instability. And yet I still think it, or a tweaked successor, will succeed. Am I not loopy?

Re:My thought on value movements: (1)

Time_Ngler (564671) | about 2 years ago | (#42226777)

Why would the price go down if BTC became easier to buy?

Re:My thought on value movements: (1)

mestar (121800) | about 2 years ago | (#42226877)

"Part of the price at the moment is because they are difficult to buy, so there is a premium. If it becomes easier, then the price may fall."

Wait, what?

Re:My thought on value movements: (1)

Rassah (2789619) | about 2 years ago | (#42228663)

"Part of the price at the moment is because they are difficult to buy, so there is a premium. If it becomes easier, then the price may fall." There may be a premium, but there is also a limit on the total available for sale. So, while making it easier to buy might bring the price down a bit, suddenly having way more people be able to buy it, and way more euros chasing the same limited available amount, will likely cause the price to go way up.

Re:My thought on value movements: (1)

mestar (121800) | about 2 years ago | (#42230487)

"So, while making it easier to buy might bring the price down a bit,"

Errr, what?

Making it easier to buy makes the demand increase. Increased demand causes prices to go up, not down.

What you wanted to say is "making it easier to sell might bring the price down".

OK, 'Easier to trade' might make more sense. (1)

robbak (775424) | about 2 years ago | (#42230687)

Yeah, that's probably my point. But, also, yes, I may have it wrong. Maybe if I explain it, it will get clear in my mind.
At the moment, it is hard to get funds into the bitcoin economy, but relatively easy to sell out. So available cash to buy coin is scarce. Therefore cash is currently expensive, so flipping it around, according to this reasoning, coins are currently undervalued.
So, yes, I'm wrong, and it should rise, all things being equal and predictable. Mea Culpa.

Why is this good news? (-1)

Anonymous Coward | about 2 years ago | (#42224489)

Wasn't Bitcoin meant to get rid of banks?

Re:Why is this good news? (3, Interesting)

IamTheRealMike (537420) | about 2 years ago | (#42224713)

You don't need a bank if you are using Bitcoin. However your existing money does and your existing trading partners do. Therefore you need a way to move between the Bitcoin and banking worlds. Hence, exchanges (which already exist, but a new one has launched).

Of course, with no banks, this leads to the question of how you can get credit from the Bitcoin economy. I explored these topics in a talk I gave at the London conference [youtube.com] , the latter part covers distributed markets [bitcoin.it] , ways to use modern cryptography in P2P networks to implement things like low overhead bond and stock markets. Consumer credit financed by individual bond issues isn't really practical today, but technology could make it so.

Re:Why is this good news? (1)

Dwonis (52652) | about 2 years ago | (#42229575)

Maybe, but I see it as more of an online payments system that scales down to micropayments and up to large, multi-million dollar transactions.

The headline is nonsense (2)

roman_mir (125474) | about 2 years ago | (#42224531)

Bitcoins cannot 'join global bank network', it's an exchange that operates as a bank in Euro while allowing Bitcoin accounts.

Saying that Bitcoins join a bank is like saying that Euros join a bank or Australian dollars join a bank. Banks operate in certain currencies, if there is more than one bank that allows Bitcoin accounts then they can exchange Bitcoins between their accounts directly without converting one currency into another for transfers.

your comment is nonsense (0)

Anonymous Coward | about 2 years ago | (#42227281)

you forgot to state that the bitcoin is a fiat currency, just like every other currency in the world today. hence you forgot to tout it as an evil socialist scheme. are you not on your medications today, or perhaps you forgot to go to church?

BANKING 101 – Video Course (0)

Anonymous Coward | about 2 years ago | (#42224741)

http://www.positivemoney.org/2012/12/banking-101-video-course

Bitcoin Central is NOT a bank or PSP (1)

fisf (2677113) | about 2 years ago | (#42226039)

As usual the summary is incorrect. But then so is the BBC article and it also vastly simplifies the regulatory framework defining what it means "to operate as a bank" (or even a PSP) -- anybody with more than a month within the finance industry could have told them that. There are various types of bank licenses for different kinds of businesses that very clearly define what you are allowed to do and under what kind of regulations. The term "bank" is too imprecise in that regard. But anyway, Bitcoin-Central is neither a PSP nor a bank and they have put up the corresponding clarification on their website: https://www.bitcoin-central.net/s/aqoba-partnership [bitcoin-central.net] "In short, Paymium is neither a bank, nor a PSP. And it doesn't need to be."

From the horse's mouth (4, Informative)

Anonymous Coward | about 2 years ago | (#42226057)

There seems to be some confusion about our recent announcement of a partnership with Aqoba allowing us to hold Euro balances legally. There has been an overwhelming response to this development, unfortunately some of the information quoted by journalists is factually incorrect.

This shall serve as a clarification.

In short, Paymium is neither a bank, nor a PSP. And it doesn't need to be.

Paymium, the company behind Bitcoin-Central has partnered with Aqoba, which is a registered PSP. The Crédit Mutuel Arkéa bank (not to be confused with the Crédit Mutuel bank) is the bank that Aqoba is associated with to provide the financial infrastructure a PSP needs.

This allows Aqoba to keep funds on behalf of third-parties in payment accounts ("comptes de paiement") which are different from bank accounts ("comptes de dépôt"). The difference between these is that funds deposited on a payment account may not be used for investments or loaned out. Additionnaly, these accounts have no overdraft capabilities.

These accounts will soon get their own IBAN number, be able to be associated with a debit card, but remain distinct from what is legally referred to as a "bank account".

In short :

Crédit Mutuel Arkéa is the bank that is used by Aqoba for its financial infrastructure needs,
Aqoba is a registered PSP,
Paymium works with Aqoba in order to operate as an intermediary when individuals and corporations wish to engage in the exchange of Bitcoins,
The "Garantie des dépôts" mechanism (which resembles the FDIC) covers our clients against a collapse of the Crédit Mutuel Arkéa bank.
Funds deposited with us will still remain clearly separated from Paymium's funds.

It is still a big development for a Bitcoin exchange to be able to operate legally within the European regulatory framework. Bitcoin-Central is leading the way in this respect. But we're neither a bank, nor a PSP. And we intend to keep it that way.

Research your articles /. (5, Informative)

bogidu (300637) | about 2 years ago | (#42226081)

Don't just help spread rumors from other sources.

There seems to be some confusion about our recent announcement of a partnership with Aqoba allowing us to hold Euro balances legally. There has been an overwhelming response to this development, unfortunately some of the information quoted by journalists is factually incorrect.

This shall serve as a clarification.

In short, Paymium is neither a bank, nor a PSP. And it doesn't need to be.

Paymium, the company behind Bitcoin-Central has partnered with Aqoba, which is a registered PSP. The Crédit Mutuel Arkéa bank (not to be confused with the Crédit Mutuel bank) is the bank that Aqoba is associated with to provide the financial infrastructure a PSP needs.

This allows Aqoba to keep funds on behalf of third-parties in payment accounts ("comptes de paiement") which are different from bank accounts ("comptes de dépôt"). The difference between these is that funds deposited on a payment account may not be used for investments or loaned out. Additionnaly, these accounts have no overdraft capabilities.

These accounts will soon get their own IBAN number, be able to be associated with a debit card, but remain distinct from what is legally referred to as a "bank account".

In short :

Crédit Mutuel Arkéa is the bank that is used by Aqoba for its financial infrastructure needs,
Aqoba is a registered PSP,
Paymium works with Aqoba in order to operate as an intermediary when individuals and corporations wish to engage in the exchange of Bitcoins,
The "Garantie des dépôts" mechanism (which resembles the FDIC) covers our clients against a collapse of the Crédit Mutuel Arkéa bank.
Funds deposited with us will still remain clearly separated from Paymium's funds.

It is still a big development for a Bitcoin exchange to be able to operate legally within the European regulatory framework. Bitcoin-Central is leading the way in this respect. But we're neither a bank, nor a PSP. And we intend to keep it that way.

that makes no sense (2)

slashmydots (2189826) | about 2 years ago | (#42231269)

That exchange is so small, I haven't even heard of it and I eat, breathe, and sleep bitcoins. EVERYONE uses MTGox to the order of about 95% of all trade volume last I heard. Once Tradehill was shut down by the state of California and the Feds based on BSA regulations, MTGox took over as the ultimate super power exchange. They're based in Japan and don't give a damn if they're part of some...whatever the hell this is. So in reality, I absolutely guarantee you with complete certainty that this exchange did it as a publicity stunt to try and convince people it has a better reputation and to use it instead.

IRS and Bitcoins (0)

Anonymous Coward | about 2 years ago | (#42231411)

If I have some cash and I put it in bitcoins, will the IRS be able to know how much I have?

sign me up (1)

ozduo (2043408) | about 2 years ago | (#42236009)

for a bitcoin card. I'll transfer my Visa debt right away plus my mastercard debt, my Amex debt and all those other cards that offered me money.
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