Politics

Bitcoin virtual currency to come to cash-strapped Cyprus via ATM

As the Cypriot financial crisis continues, some are seeing a new opportunity for the popular Internet crypto-currency Bitcoin to gain broader acceptance.

Entrepreneur Jeff Berwick, founder of Canadian financial investment services company Stockhouse.com and CEO of TDV Media, announced earlier this week plans to open up an ATM in Cyprus to allow customers to exchange cash for Bitcoins, the popular decentralized Internet virtual currency.

Berwick is calling his new company BitcoinATM.

Fearing a bank run resulting from the panic caused by the EU and IMF’s initial €10 billion deal with Cyprus — which included a one-off 6.7 percent tax on deposits of up to €100,000, and a 9.9 percent tax on higher amounts— local banks froze bank accounts, cutting Cypriots off from their funds.

While the initial deal was rejected by the Cypriot parliament, Cyprus President Nicos Anastasiades, Eurozone finance ministers, and IMF officials agreed to a different deal on March 25 that impacted numerous uninsured bank accounts.

After the European Commission, European Central Bank and the IMF first announced their bailout deal with Cyprus, for example, the value of one Bitcoin has risen from $48 USD to its current value of more than $80 USD.

The surge in interest has exploded the overall value of the Bitcoin economy to beyond $800 million, reports Fox News.

BGR News reported last week Monday that several Bitcoin-related apps surged in popularity on the Spanish iPhone market. Also, an analysis of Google Trends also shows that worldwide search interest in the currency has risen significantly in the past month.

Bitcoin has been the subject of some controversy given its association with the sale of illicit drugs on the Internet.

It first emerged in 2009 as an online peer-to-peer crypto-currency. Users can exchange real currency for Bitcoins, and the transactions are encrypted and nearly anonymous, making it an attractive option for those looking to evade the ever-watchful eye of governments.

Its popularity and acceptance on the Internet, however, continues to grow as trust continues to erode in the world’s central banking institutions – acting as a kind of commodity similar to the way gold works.

Bitcoins are also accepted by numerous businesses on the Internet, including WordPress.

Since BitcoinATM’s technology would act as an intermediary between the Bitcoin world and the financial system, it would need to meet certain regulatory requirements.

In the U.S., for example, the Financial Crimes Enforcement Network (FinCEN) — a bureau of the U.S. Department of the Treasury — recently announced money-laundering rules with respect to virtual currencies.