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Central Bank warns of Bitcoin risks as first ATM is installed

A Bitcoin ATM


BITCOIN fans have been warned by the Central Bank that buying the virtual currency is riskier than buying real money from financial institutions.

The warning came as the country's first bitcoin ATM opened for business in Dublin's Temple Bar. The ATM converts real euros into the digital currency. The machine, made by Bitcoin ATM manufacturer Bitvendo and placed in Hippety's Cafe in Temple Bar, accepts cash for virtual currency top-ups.


The Central Bank said anyone buying the virtual currency from vending machines here will not enjoy the same protection as those buying real currencies from regulated financial institutions.


Ireland's institutions have been slow to welcome the five-year-old virtual or 'crypto' currency which is made up of computer code that can be bought and sold online for hard currencies. The Revenue Commissioners has not yet decided whether to apply VAT to bitcoin transactions, while other taxes such as corporation tax are understood to remain applicable to trading activity using Bitcoin in Ireland.


Britain plans to drop VAT on Bitcoin trading.


Irish businesses have also been slow to accept Bitcoin as payment - although it is used by Dublin city mobile phone shop GSM Solutions, Wexford-based CCTV firm Visiconnex and an Offaly bed and breakfast.


The situation is different abroad. Companies such as BitPay and WagePoint allow companies to pay employees in Bitcoin. Giant retailers Overstocked.com and TigerDirect.com accept Bitcoin for the thousands of everyday products they sell, including jewellery, electronics, health products and home furnishings.


Earlier this month, the oldest Bitcoin trading exchange, Mt Gox, collapsed with almost €300m missing from accounts. Despite the incident, Bitcoin prices have continued to rise, with the current trading level approaching $700 (€530). Some of the growth in the virtual currency is also attributed to black market trading in illegal commodities such as drugs and weapons.


A US regulator warned earlier this month that Bitcoin can expose people to significant losses, fraud and theft, and the lure of a potential quick profit should not blind investors to the virtual currency's significant risks.


Irish Independent



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