UK Royal Mint mulls issuing gold-backed physical bitcoins
Bitcoin, the increasingly popular digital currency has had a tremendous run up. Last week it broke the $1,000 per unit barrier, according to Japanese exchange Mt. Gox, one of the many bitcoin trading markets. And now, none other than the UK Royal Mint is said to have been working on plans since this summer to issue gold-physical bitcoins in collaboration with the Channel Island of Alderney, reports FT.com.
The tiny island would become this way one of the world’s first financial services centres devoted to digital currency.
The physical bitcoins, like other such tokens, would be collectors’ items rather than circulated, and would likely have a gold content (about US$820 worth) to further their appeal and allow them to retain value should bitcoin’s price crash. They would also act as promotional symbols for the “more serious” bitcoin payment and exchange services.
The Channel Islands, just off the coast of France, are “Crown Dependencies” and not officially part of the UK. This special legal status has traditionally made them a hub for offshore financial services.
While the UK handles defence and foreign relations for Alderney, details of island law on such things as the legality or not of online gambling, trading in bitcoins or anything else of that nature are set locally.
This is why, writes Forbes’ contributor Tim Worstall, if you were looking for “a legal jurisdiction where you could get the law set up just right to make it easy to deal in bitcoins [Alderney] would be an attractive place to be.”
Though bitcoin has not yet been subjected to heavy-handed regulation in Asia, Europe and the US, regulators and lawmakers around the world are discussing the implications of the virtual currency’s expansion, particularly regarding its association with black market purchases.