Bitcoin and BitInstant Means Cash in Hand

Bitcoin is an experimental new digital currency that enables instant payments to anyone, anywhere in the world. Those with funds in the online peer-to-peer currency Bitcoin may soon be able to withdraw real-world cash directly from an ATM. Charlie Shrem, the co-founder of BitInstant, which lets users convert Bitcoins (BTC) into cash, appears to have confirmed that a standard credit or debit card will be made available to Bitcoin users at some point in the next two months.

BitInstant is well known for facilitating transactions between virtual Bitcoin and government-approved currencies, but an ATM-withdrawal mechanism would be an unprecedented step towards bridging the two worlds.

In an online chat with the technology blog Coding in my Sleep, Shrem revealed that BitInstant would be partnering with an unnamed international bank to make the card usable worldwide. Although the first one thousand cards will reportedly be given away for free, Shrem estimated that the subsequent price would be around $10 USD (£6.34) - roughly the going rate for 1 BTC. Those looking to register their interest for a card have been asked to do so by filling in a Google Docs form.

Before the cards can be issued, however, applicants will have to comply with the same legal regulations banks impose on ordinary credit card users. Given that this includes formal identification as well as proof of address, many may shy away from the new service. The anonymity provided by Bitcoin has long proved one of its most attractive features, allowing users to trade in black-market goods and bypass government restrictions. Shrem may well find that these virtual freedoms are not for sale.

[Sources: Bitcoin, NewScientist & Gilead Amit]