BitInstant says its virtual currency debit card could be real by October
Virtual currency exchange service BitInstant says that the launch of the world’s first officially certified Bitcoin Paycard (technically a debit card) is going according to plan, although the project is at an early stage and no payment processing company is involved yet.
On Wednesday, MasterCard denied it had been working on a BitCoin card. BitInstant has explained that it hadn’t approached the payment processor yet, but is conducting negotiations with its affiliate partners prior to an official submission.
If these negotiations go well, the card could be released as soon as October, BitInstant says.
Full steam ahead
BitCoins, or BTC, make up a decentralised virtual cryptocurrency commonly used online among people interested in keeping their transactions anonymous. It is not tied to any real money, but traded on various electronic exchanges to establish its price.
Although BitCoins have many advantages over national forms of currency, virtual money has acquired a negative reputation, with reports in the media linking it to illegal drug trade and other unsavoury online dealings.
BitInstant is working to reverse that, with the help of a secure, official BitCoin debit card, and shared these plans in online chats – along with the image shown here of a card complete with a MasterCard logo (blurred out by TechWeekEurope).
According to Erik Voorhees, director of marketing and communications at BitInstant, a direct relationship with MasterCard is not necessary for the launch of the card. The main responsibility for interfacing with the payment processor will fall on the yet unnamed partner – the bank which will be issuing the card.
In a blog post on the BitInstant website, Vorhees said this bank has been successfully working with MasterCard for many years. He also promised that the Paycard program will follow strict anti-money laundering and customer identification policies, the same as any other credit or debit card.
“These will not be “anonymous” debit cards, but rather a highly convenient means for verified customers to spend BitCoin value around the world,” said Vorhees.
The virtual currency exchange will approach MasterCard when all the preparations are complete, assisted by its banking partners. “Bringing legitimacy, ease of use, and familiarity to the revolutionary – though often misunderstood – BitCoin technology is a primary goal of BitInstant, and the Paycard program will do just this,” concluded Vorhees.
The card will function as a standard debit or credit card and should be accepted anywhere that accepts MasterCard. It will hold all the balances in either US dollars or cardholder’s local currency, but will be funded by BitCoins transferred to the card by BitInstant.
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. 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.
What do you know about Tech stocks and shares? Take our quiz!