It's All About the Bitcoins

Bitcoin-Central Becomes First Bitcoin Exchange to Operate as a Bank

Coming soon: debit cards funded by BTC.
Mr. Francois (Photo: Paymium)

Mr. Francois (Photo: Paymium)

Big news for Bitcoin today: in a post on Bitcoin Talk, Paymium CTO David Francois announced that Bitcoin-Central, an exchange operated by Paymium, has scored a partnership with Aqoba and Credit Mutuel that will allow it to operate as a bank. The move will provide Bitcoin-Central with protections afforded to payment service providers in Europe, including insurance on Bitcoin accounts worth up to 100,000 Euros.

The insurance on deposits is only for euro-denominated deposits, and funds in euros are stored at the bank. Bitcoin balances are not stored at the bank, and are not insured.

In addition to protections provided by the Garantie des dépôts (France’s FDIC), user funds will also be held at Credit Mutuel under their name instead of an online Bitcoin wallet, ostensibly providing accounts with more stringent security. This may be attractive to users worried about theft, considering some Bitcoin exchanges have been the target of heists in recent months.

Mr. Francois also elaborated on some other benefits:

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

Though some Bitcoin users may be against regulation, this partnership could prove an effective step towards legitimizing Bitcoin for those who still view it as a black market hacker currency.

Update:

A commenter writes in to clarify:

The insurance on deposits is only for euro-denominated deposits, and funds in euros are stored at the bank. Bitcoin balances are not stored at the bank, and are not insured.

 

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