* UNic accepts payment, ‘Bee’ card wallet soon *
Love it or hate it, the age of the Bitcoin is upon us.
Valued at $840 or 620 euros on the open market, it is gradually creeping into more services and establishments in Cyprus, while the authorities are still pondering whether to regulate the virtual currency as a form of legal tender for equities, forex, futures or other products, but not necessarily the trade of the Bitcoin itself.
To begin with, Neo & Bee LMB Subsidiaries http://bit-banking.eu/ will be opening a shop (a real one) in Nicosia later this month and gradually branching out across the island to promote the virtues of the Bitcoin.
CEO Danny Brewster told the Financial Mirror that the first branch will open on February 24 and will be branded as a ‘Neo public information store’.
The company already employs 35 people and has hired services from a further 25 software developers.
The University of Nicosia that announced late last year that it, too, would accept fee payments using Bitcoin, has already been paid by an overseas student.
“We thought of accepting Bitcoin payments as a facility for students from countries where money transfer is very difficult or too costly,” a senior official at the University told the Financial Mirror.
“But our intention is not to trade in the virtual currency. As soon as we accept Bitcoins, these are converted to our local currency,” the official said.
The university's chief financial officer, Christos Vlachos, said the institution, which has about 8,500 students enrolled, is the first in the world to take bitcoin payments.
Bitcoin is a cryptography based digital currency that advocates say is counterfeit-proof. Its value is determined by supply — which is limited by its design — and demand.
Vlachos said that the university is also offering a new Master’s degree in digital currency, a field he says is the monetary equivalent of the Internet in its infancy. "It's the gold of tomorrow," he said.
Vlachos said the Cypriot government should set up a regulatory framework to attract digital currency trading companies and boost the bailed-out country's foundering economy.
The university plans to encourage the government to develop the country into a hub for Bitcoin trading, processing and banking.
“Bitcoins have value because they are useful, they can travel immediately and they cannot be reproduced by fiat, by anyone. I sincerely wish such transparent and free protocols were available by voluntary consensus to everyone,” said Brewster.
Meanwhile, officials at both the Cyprus Stock Exchange and the regulator Securities and Exchange Commission (CySEC) are a bit hesitant to reveal what they plan to do.
The Central Bank’s continued warnings about the use of the Bitcoin have hampered the CSE’s plans to introduce the virtual currency on the Cypriot bourse and subsequently secure a passport for acceptance in other EU jurisdictions as well.
A senior CSE official told the Financial Mirror that plans have not been put on hold, but that “we are continuing with our study of the matter, to see how things develop.”
CSE Director Nontas Metaxas had earlier told the Financial Mirror that the aim was to introduce new products and services on the Cypriot bourse that has lost 80% of its trading volume after Laiki collapsed and Bank of Cyprus was suspended.
He said that the future for the CSE is to introduce derivatives and commodities, while the NEA alternative market has already attracted some 15 listings.
The CSE is one of the semi-government organisations that will be spun off or privatised altogether, as part of the administration’s efforts to raise revenue and diversify away from non-essential services and assets. But poor trading volume will make it unattractive to investors, with pre-crisis estimates for the sale of the bourse in the region of about 20 mln euros.
The Central Bank of Cyprus had warned late in 2013 that using the bitcoin is ‘particularly dangerous’, given that it is not regulated by any system and its operation is unchecked.
The official Cyprus News Agency had quoted unnamed sources as saying that the government feels that the virtual currency is too risky at present.
While acknowledging that Bitcoin is innovative, the same sources pointed out that it is not backed up by anything tangible and it also poses many risks. Trading from a high of above $1,000, the value fell after the central banks of China and France issued warnings against the Bitcoin.
Anyone wishing to deal in the currency, the sources suggested, should first weigh all possible risks involved.
The matter was discussed a few years ago at EU level and it was decided at the time that virtual currency systems should not be regulated as such an action would legitimise them, the sources explained. Instead authorities should issue warnings but it should be the responsibility of individuals to protect themselves.
Neo CEO Danny Brewster had said in December that “we want to operate under the regulatory framework that they deem appropriate.”
He recently told the Financial Mirror that the company’s policy remains the same and that Neo & Bee would like to work out ways to regulate the Bitcoin, both by the Central Bank and CySEC, as well as to one day see it used as a trade denomination on the CSE.
Finally, Neo & Bee’s Brewster said that one of the products to be promoted will be the ‘Bee’ card “which is linked directly to the holder’s Bitcoin wallet, this enables them to spend Bitcoin with any merchant that accepts Bitcoin or Bee cards.
“The benefits for merchants accepting Bee/Bitcoin payments is 0 transaction fees, 0 in commission and instant settlement. The merchant can also select how much exposure they want to the Bitcoin volatility,” he added.
Danny Brewster refuted rumours that Alpha Mega, one of the island’s leading super market chains, was considering accepting Bitcoin payments.
“We are not in discussions with AlphaMega,” he said.
“We do, however, have ongoing discussions with merchants around the world, who want to accept Bitcoin payments. Merchants will integrate our online gateway with their websites and install payment terminals in their stores.”