BitCoin Debit Card Coming Soon
According to rumours, BitInstant will be launching a MasterCard with BitCoin support in six to eight weeks
Virtual currency exchange service BitInstant is said to be in the final stages of creating a debit card that will work worldwide with the MasterCard standard, but also allow transactions in BitCoins.
The launch of the card could add a sense of legitimacy and improve the reputation of the widely-used virtual currency.
UPDATE: MasterCard has denied that it is working with BitInstant to create a BitCoin debit card. You can read more details here.
BitCoins, or BTC, make up a decentralised virtual cryptocurrency commonly used online among people interested in keeping their transactions secret. It is not tied to any real money, but traded on various electronic exchanges to establish its price. Such exchange websites have proved vulnerable to hack attacks in the past, prompting fluctuations in BitCoin value.
A report by Coding In My Sleep, detailing an IRC chat with BitInstant co-founder Charlie Shrem, suggests that a MasterCard with BitCoin support could be available as early as October.
The card will function as a standard debit or credit card and should be accepted anywhere that accepts MasterCard, but the users will be able to store their balance in BitCoins.
The cards themselves will be issued by “a major international bank” that has agreed to partner with BitInstant. Since the bank will have to comply with financial regulations, interested parties will have to prove their identity before being issued with a card. This means that card owners will lose out on one of the most important properties of BitCoin transactions – anonymity.
Each card will bear a QR code on the front and a printed BitCoin address on the back, allowing instant transfers to and from the account. BitInstant will collect roughly one percent of every transaction in fees, which is less than what PayPal charges on transfers from eBay. The users will also have to pay a fixed fee if they want to withdraw their cash at an ATM.
BitInstant has already opened the signup process for the new cards. You can register your interest here.
BitCoins have recently emerged as the only way for WikiLeaks to get its funding donations, following a blockade by VISA, MasterCard, PayPal and Western Union. According to Forbes, WikiLeaks has received at least the equivalent of $32,000 in more than 1,100 separate BitCoin donations since December 2010.
However, the virtual currency certainly has its drawbacks. Earlier this month, four former customers have sued the virtual currency exchange Bitcoinica, after it failed to pay out $460,457 (£293,080) worth of funds they previously deposited. The situation was the direct result of at least three hacker attacks that relieved the website of its BitCoins.
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