Home Features Alderney to cash in on virtual Bitcoins with British Royal Mint reality

Alderney to cash in on virtual Bitcoins with British Royal Mint reality


By Jane Wild in London

The tiny channel island of Alderney is launching an audacious bid to become the first jurisdiction to mint physical Bitcoins, amid a global race to capitalise on the quickly appreciating virtual currency.

The three-mile long British crown dependency has been working on plans to issue physical Bitcoins in partnership with the UK’s Royal Mint since the summer, according to documents seen by the Financial Times.

It wants to launch itself as the first international centre for Bitcoin transactions by setting up a cluster of services that are compliant with anti-money laundering rules, including exchanges, payment services and a Bitcoin storage vault.

The special Bitcoin would be part of the Royal Mint’s commemorative collection, which includes special coins and stamps that are normally bought by collectors. It would have a gold content – a figure of £500-worth has been proposed – meaning that holders could melt it down and sell it if the value of the virtual currency collapsed.

The hype surrounding Bitcoin has grown steadily in recent months and its value rocketed – the price of a single Bitcoin hit a new peak of $1,242 yesterday.

Critics warn of a speculative bubble although its proponents believe the currency could be widely adopted as a method of making payments outside the traditional banking system. Ben Bernanke, chairman of the Federal Reserve, and other government officials around the world have said virtual currencies could have benefits if they can be regulated to prevent money laundering. [eap_ad_1] Holders of the physical Alderney Bitcoin would not be able to spend it in the shops, but could exchange it for a unit of the virtual Bitcoin by travelling to the island.

Alderney hopes that by minting the first physical Bitcoin it will raise its profile as the “go-to” destination for the virtual currency, as it seeks to expand its offshore credentials beyond online gambling.

David Janczewski, head of new business at the Royal Mint, confirmed it had been approached by the finance minister of Alderney to “explore the possibility of manufacturing a physical commemorative coin with a Bitcoin theme”. “Discussions have not progressed further and at this stage it remains nothing more than a concept,” he added.

The controversy around Bitcoin has made Alderney’s plan a sensitive subject. The Treasury, which owns the Royal Mint, declined to comment. George Osborne, chancellor, also holds the title of Master of the Mint.

The move has been steered by the chairman of the island finance committee and is understood to have the support of Alderney’s president. It still needs to be approved by the island’s 10-member parliament.

A number of private companies have produced physical Bitcoins, pictured left, although they are not backed by an official mint. Instead they feature a holographic strip, which is peeled off to reveal the private key then redeemed online.[eap_ad_4]

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