Bitcoin and the future of money

Is it time to get on board the virtual currency train? Clearly Contacts and other retailers are accepting Bitcoins.
bitcoin

The digital currency Bitcoin gained another foothold in Canada this week as six BTM (Bitcoin Teller Machine) machines were officially launched in the Toronto area.

Cavirtex, a Canadian Bitcoin exchange and service provider, unveiled the machines to be stationed inside six Gateway Newstand locations (including one at BCE Place, in the heart of Toronto’s financial district), which will allow users to buy and sell up to $3,000 Cdn worth of Bitcoins (currently exchanging for around $600 Cdn for one Bitcoin).

The Calgary-based company says it plans to establish more machines in Vancouver, Niagara Falls, Ottawa and Halifax. The peer-to-peer payment system and currency was introduced as an open source software in 2009, allowing users to pay for goods, services or transfer funds without involving third parties or financial institutions.

Though it’s had its share of tough times lately (with hackers breaching lenders and the U.S. Consumer Financial Protection Bureau issuing warnings about the pitfalls of virtual currencies), its  growing acceptance adds another twist to the evolution of money. Canada is already pegged as one of the countries, along with Belgium and France, that is closest to going cashless, according to a MasterCard Advisors study from September 2013. Cash comprises just 10% of the total value of consumer payments here. And with mobile wallets being developed by major financial institutions, society is reaching the point where it will be possible to leave a wallet at home.

Bitcoin exists outside of currency as we think of it today. It is not tied to any central bank and governments are now hustling to make legislative changes to anti-money laundering laws to address it.

But in the meantime, companies as large as Dell have started accepting Bitcoin payments, cashing in on the publicity but also taking advantage of generally lower transaction rates, while opening a new channel to boost sales. Canadian brand Clearly Contacts, the world’s largest online retailer of glasses, came on board, one of merchants in Canada that accept Bitcoin, according to the site Bitcoinada.com

Kyle Kemper, VP of business development at Cavirtex, says these are still early days for virtual currencies. He envisions companies launching their own currencies – think of paying with Canadian Tire money gone digital – as a new form of loyalty points.

“Bitcoins are the future of money,” he says. “The grand, grand vision is there will be wallets…that work with a bunch of different currencies and it will be seamless going between all the currencies.”