Bitcoin exchange teams with US banks to broaden service
The largest Bitcoin exchange in the world will have a presence in the U.S. starting this month, a move intended to make it easier for people in the U.S. and Canada to buy the virtual currency.
The exchange, called Mt. Gox, is working with the U.S. startup CoinLab and Silicon Valley Bank to offer its trading services by March 31, says Peter Vessenes, CEO of CoinLab.
Mt. Gox is based in Japan. It offers the largest market to buy Bitcoins, which is an electronic currency that uses a distributed, peer-to-peer cryptographic system to verify transactions.
Easier access in US, Canada
Buying Bitcoins is not particularly easy, since most exchanges require either cash-in-hand transfers at a bank or a wire transfer. Exchanges typically do not allow people to buy Bitcoins with credit or debit cards because of fraud risks.
Vessenes wrote that Mt. Gox, despite some previous security problems, has the most advanced and secure system for trading and buying bitcoins. But using Mt. Gox isn't easy for people in the U.S. and Canada, he wrote.
"For U.S. customers, working with Mt. Gox can be difficult at times," Vessenes wrote. "They are in a different time zone, moving money to them is a real challenge and often people worry about delays and availability receiving withdrawals—all things which hurt the Bitcoin landscape as a whole."
Under the deal, Mt. Gox customers in the U.S. and Canada will see their funds move over to the U.S. For people in those countries, Mt. Gox's website will have a CoinLab brand.
CoinLab intends to improve customer service as well as focus on security for both Bitcoin and cash holdings. Silicon Valley Bank will provide back-end banking services for CoinLab.
"We're putting a lot of resources into improving the customer experience for buying, selling and trading Bitcoins right now, and those changes will roll out after we launch," Vessenes wrote.
Slow adoption of virtual currency
Bitcoin, which debuted in 2009, is the creation of Satoshi Nakamoto, a presumed pseudonym for an expert cryptographer who described the system in a nine-page white paper.
The electronic currency can be transferred using one of the many software clients that implement its protocol. It takes about an hour or less for a transaction to be confirmed anywhere in the world. Transfers incur either a very low fee or are free.
Bitcoin has been edging its way from the fringe into more mainstream use, and several companies are developing tools for merchants to more easily accept it. In the last few months, WordPress, Reddit, and the file-sharing service Mega started accepting bitcoins for payments.
The currency has surged in the last month from around $18 to more than $30. A bitcoin sale hit its all-time high last week, when a single bitcoin was sold on Mt. Gox for more than $33.