TORONTO – A Calgary company is looking to boost the profile of the world’s newest, and most controversial, currency with the launch of six more teller machines in Toronto that deal in the virtual currency Bitcoin.
“With Toronto being the main commercial centre, I think it’s a natural fit,” said Kyle Kemper, vice-president of business development with CAVITREX, a Bitcoin exchange and service provider, at the launch Tuesday in Toronto’s financial district.
“We’re flexible, dynamic and we’re on the forefront of technology and I think that’s something we can be proud of,” he added.
Kemper said the six new machines, which have been installed in select locations, brings the number of Bitcoin teller machines in Toronto to 19 and a total of 30 across Canada.
Bitcoins, created in 2009, are an international virtual currency that are traded online and not regulated by banks or a central authority. Their appeal lies in the ability to make online transactions with relative anonymity and without fees.
Users can install a Bitcoin wallet on their computer or mobile phone, which will generate a special address to which others can send payments.
The currency’s appeal is growing, with publicly traded companies such as computer technology company Dell Inc. and travel booking service Expedia Inc., among the major businesses accepting Bitcoin payments.
For all the excitement, the currency’s unregulated nature regularly triggers big swings in the exchange rate and leaves it vulnerable to security concerns — an issue that has been raised by several countries. Ottawa’s Finance Department warned in an internal memo earlier this year that the high level of anonymity and lack of regulation associated with Bitcoin transactions may make the virtual currency “an attractive payment method for criminals.”
And the head of the U.S. Consumer Financial Protection Bureau said “consumers are stepping into the Wild West” when dealing with virtual currencies.
On Monday, a U.S. cyber security company said a hacker using a Canadian Internet service provider hijacked traffic from foreign networks to steal more than US$83,000 in Bitcoin over a four-month period. Those affected will likely never recover their Bitcoins.
But others see the currency’s potential over its risk.
Kemper said CAVITREX has over 40,000 registered users and has traded over $93 million in Bitcoin.
Corey Jason uses the currency in his web development and marketing business in Toronto. Whenever possible, Jason says he tries to buy supplies that also deal in Bitcoin and he encourages his clients to consider accepting Bitcoin payments.
“There’s a crossover effect for our businesses,” said Jason, who was at the Toronto launch. The benefits are that it cuts down on the cost of doing business and makes operations run more efficiently, he said.
Brad Edwards, Jason’s business partner, said he uses Bitcoin for currency trading — and, without providing details, claimed it’s been a profitable venture.
“I got a taste for high-risk investment. I’m investing money I can afford to lose,” said Edwards. “I’m confident that Bitcoin is the future of money.”
“We’ve met people [in Toronto] who are paying their rent in Bitcoin, who buy their groceries in Bitcoin,” added Jason. “There are people who are looking to only spend their money on merchants that accept Bitcoin.”
Gateway Newstands is placing the machines in its convenience stores and kiosks. Noah Aychental, vice-president for marketing and promotions, said Gateway hopes to become the first national convenience store chain to accept Bitcoin.
“Once we see the success rate and the redemption rate of these machines, I think the next natural step would be to accept the coins at Gateway,” said Aychental.
The teller machines allow holders of the cryptocurrency to quickly access their funds, said Kemper, adding that the company is on track to installing two more machines in Alberta and British Columbia.
But CAVITREX’s machines aren’t yet outfitted to dispense cash like conventional bank machines — The BTMs, about the size of a post office box and painted bright red and white with a Maple Leaf logo on the front, will only facilitate the purchase of Bitcoins.
Kemper said the machines will eventually be able to spit out cash and deposit converted Bitcoins through a debit card.
The daily user limit for purchasing Bitcoins is $3,000 and there is also a fee for using the machines that ranges between five to 10 per cent.
One Bitcoin exchanges today for nearly C$600.