Bitcoin exchange gains backing from French bank

Summary:The Bitcoin-Central exchange has partnered with French financial institutions to provider users with payment accounts and deposit guarantees.

Paymium, the company running Bitcoin-Central, has entered into a partnership with payment processor Aqoba and French bank Credit Mutuel Arkéa, enabling it to create accounts to hold the bitcoin currency.

bitcoin-exchange-gains-backing-from-french-bank-payment-processor
(Stack of bitcoins isolated on white. Computer generated 3D photo rendering image by ppart, Shutterstock)

Bitcoin-Central staffer "davout" announced the partnership on Bitcoin Forum. He said that Bitcoin-Central is now the first bitcoin exchange operating within European regulations. This, coupled with its new partnership, means that Bitcoins would be subject to the same protections as Euros held at the Credit Mutuel Arkéa bank.

"Our user's accounts will be protected by the 'Garantie des dépôts', which is the French equivalent of the American [Federal Deposit Insurance Corporation]," davout wrote. Roughly translated as a deposit guarantee fund, the main difference between it and its US equivalent is that, in the event that the bank collapses, Euro deposits are insured up to the value of EU$100,000. The FDIC insures deposits of up to US$250,000.

In the coming months, Paymium expects that account holders will be able to order debit cards, allowing them to use their accounts to make cash withdrawals and purchases.

The accounts can be used just like any other payment account, having its own international bank account number, and users will have the option of converting any deposited funds directly into the bitcoin currency.

Although payments can be made and received via the accounts, strictly speaking, they are not considered bank accounts. Funds deposited cannot be used for investments, and the accounts will not have any overdraft features.

As a currency emerging from the digital space, bitcoin has been subject to a number of security concerns. Competing bitcoin exchange market BitFloor was recently robbed of bitcoins worth over US$250,000 after a number of its servers were hacked. The Australian Broadcasting Corporation (ABC) also had a rogue employee attempt to mine for bitcoins using its infrastructure — an act it quickly clamped down on.

The ABC employee could have been taking cues from online criminals that have been creating farms of botnets to mine for bitcoins or by using malware to surreptitiously steal bitcoins from users' digital wallets.

Trend Micro has only recently picked up on a Trojan that pretends to be one of its own antivirus components, while secretly mining for bitcoins on infected machines.

The company didn't disclose where they had found the sample, but upon inspecting it, found that it dropped an open-source bitcoin miner developed by Ufasoft.

Topics: Security, Banking, E-Commerce, EU

About

A Sydney, Australia-based journalist, Michael Lee covers a gamut of news in the technology space including information security, state Government initiatives, and local startups.

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