NEW YORK - Digital currency money transfer service BitInstant is set to launch the first internationally accepted Bitcoin-funded debit card within the next two months, CNN Money reports.
Launched in 2009, Bitcoin is a "cryptocurrency" that consists of mathematical tokens and is deployed through a peer-to-peer transaction network.
While far from common, Bitcoin are valid payment for all kinds of goods and services. Their value is derived from a community that has collectively decided to accept the notes as tender, with a value that fluctuates like traditional currency.
New York-based BitInstant, an 11-month old startup, is attempting to bridge the Bitcoin economy with the regular consumer world with its new debit card.
"We want to be the Apple of Bitcoin," says Charlie Shrem, the CEO of BitInstant. "We want everything to be sleek, sexy, beautiful, fluid, automated."
BitInstant currently facilitates Bitcoin transactions across a variety of exchanges, handling $2.5 million a month of transaction volume. Shrem said it is close to securing a $1 million round of venture capital financing.
BitInstant is partnering with two major (yet unnamed) banks for its forthcoming Paycard, which Shrem said would allow it to connect with MasterCard€™s network, thus using it at traditional retailers. BitInstant plans to limit its initial release to 5,000 cards.
BitInstant notes on its website that significant press coverage has essentially leaked the news of its pre-paid debit card a little earlier than the company would have preferred. Nonetheless, it€™s happy to take calls from reporters and explain a few details:
- BitInstant plans to release the Paycard in roughly eight weeks and is working with its partners to make this card program happen.
- MasterCard denied to reporters any knowledge of the program because formal negotiations are in progress with the MasterCard affiliate partners prior to full MasterCard submission.
- BitInstant€™s partners, who are issuing the card, have been working with MasterCard for many years, and the specific relationship will be between these partners and MasterCard (not directly between MasterCard and BitInstant).
- BitInstant€™s Paycard program follows the strict AML and KYC policies, which are required for such programs. All balances for the purposes of the card are held and collateralized in USD (or the cardholder€™s native currency). BitInstant instantly funds the cards in USD, after receiving the user€™s Bitcoins. These will not be "anonymous" debit cards, but rather a highly convenient means for verified customers to spend Bitcoin value around the world.
- The card program is moving forward and the arrangement with MasterCard will be handled in due time at the proper stage of the process by the partners who work directly with that company.
- Bringing legitimacy, ease of use, and familiarity to the revolutionary - though often misunderstood - Bitcoin technology is a primary goal of BitInstant.