Monday, March 3, 2014

Bitcoin VAT to be scrapped by HMRC

The Bitcoin community is targeting the "last barrier" of financial regulation after HMRC was today expected to agree to scrap VAT on the digital currency.
It was reported in January that HMRC was considering exempting Bitcoin from VAT liabilities by reclassifying it to something similar to a fiat currency, and it is expected to confirm the change this week after a meeting with British Bitcoin traders.
It means that businesses would no longer be forced to pay the 20% VAT rate on all revenues held in the currency over a threshold of £79,000 - something seen as a barrier to international competitiveness.
Members of the UK Digital Currency Association (UKDCA), which held the talks with HMRC, hailed the decision and predicted that it will pressurise the Financial Conduct Authority (FCA) to publish guidance on Bitcoin.
Tom Robinson, UKDCA director and co-founder of Bitcoin insured storage firm Elliptic Vault, said: "It's a very progressive view. The decision really puts pressure on the FCA because if it's money, then they should be regulating it.
"The last barrier is financial regulation. The only issue is the FCA still refuses to say anything about it."
He added that the UKDCA has heard nothing from the authority since a meeting between the parties last year.
A spokesman for the body simply told CBR it is keeping a close eye on developments.
He said: "Whilst the FCA does not regulate Bitcoins, businesses providing services related to bitcoins, or other digital currencies, should consider whether they are carrying on regulated activities. As you would expect, the FCA does closely watch new developments in the market."
HMRC's decision comes at a time when the Bitcoin Foundation, a not-for-profit group that develops the software behind the currency, is allegedly preparing to move its headquarters from the US to the UK this spring.
And UKDCA member, and CEO of Bitcoin integration firm Bitcoin Solutions, Gary Rowe, said the news could promote Britain as a hub for cryptocurrency businesses.
"The guidance from HMRC is a major step forward," he said. "I hope that this will show people that the UK is Bitcoin-friendly.
"It's a big green light for business in the UK regarding Bitcoin. The next big thing is guidance from the FCA. It doesn't have to be anything new or special, it just has to treat it the same as anything else."
He said FCA regulation would prove to people that the digital medium of exchange is safe to use, and hopes it could formalise Bitcoin exchanges after Mt. Gox closed following the alleged loss of $350m worth of bitcoins.
"Anybody in the Bitcoin business knew Mt. Gox was going downhill. They had serious problems," Rowe said. "Exchanges should be in the hands of the professionals. Imagine if the LSE took over Bitcoin."
But IDC analyst Alex Kwiatkowski told CBR people should remain sceptical of the currency.
The head of financial insights for Europe said: "The volatility of Bitcoin - not just its price but the collapse of various supporting elements vital to the currency's existence (i.e. Mt. Gox) - should make businesses wary of piling in to something which is still going through the painful teething process."
However, Robinson claimed that Bitcoin is robust, adding that price fluctuations should settle once it is more widely adopted - something he believes will happen if the FCA publishes guidance.

Monday, February 24, 2014

Bitcoins being accepted at Australian jeweller: Shiels Jewellers

This will be first Australian jewellery retailer to accept Bitcoin's digital currency for online sales. Adelaide-based Shiels recently joined the list and its managing director Toby Bensimon said it has been receiving one or two transactions per day through the online currency.

Shiels has an online store that conducts a large number of transactions every day. The number of sales with Bitcoin is still very small, but Sheils believes that the future  opportunities it presents are huge.&nbsp

Bitcoins being accepted at Indian online retailer Highkart will be the first e-commerce website in India to accept 'Bitcoin payment' for products. 
They sell various products across various categories including mobiles, cameras, and computers with a lot more to come.

Highkart website says that "For people who own Bitcoins, it has become more of a saving rather than them putting them into some use, as in India; there was no other option till date. We wanted people to use Bitcoin in their day to day lives, thus helping them to be less dependent on the fiat currency which is fast depreciating! And making it a commodity in process."

"With Bitcoin the number of benefits associated are many, including very low / nil transaction fees, no chargebacks and no delays for starting to accept with an unprecedented security factor.There is no need to look it at as a barrier as with technology up-gradation, advancement and acceptability it will have a much larger user base than usual payment systems. We are working very hard and with great community support looking forward to make the cryptocurrency as mainstream currency and not just virtual currency. " says Amit Kumar, the CEO of High kart

On being able to manage the volatility of bitocin Amit said "We do not store Bitcoin with us and with great support from our payment processor we are able to encash it on same day, which reduces any kind of risk involved due to volatility of Bitcoin."