Getting paid in Bitcoin: These businesses are ready for it - but are their customers?
Whether you're a geek with a love of cryptocurrency, or you're just from a country outside the eurozone and want to avoid banks' outrageous currency conversion fees, for your next holiday in Italy you might want to try something new: pay in bitcoins.
The number of Italian merchants and stores that accept this kind of payment is on the rise, According to CoinMap.org, a website which tracks Bitcoin usage in the world, and Bitcoin Foundation Italia, an organization promoting the use of the virtual currency.
"CoinMap lists around 170 businesses that give customers the chance to pay with bitcoins," says Franco Cimatti, chairman of the foundation "but there are actually more, as many do not use the website because they don't know how to subscribe or ignore its existence."
The early adopters in Italy are chiefly hotels, B&Bs and farmhouses, located mainly — but not exclusively — in the northern part of the country and in big cities like Milan, Florence, Rome and Naples.
Unsurprisingly perhaps, some of these businesses aren't run by Italians, but by foreigners who can easily put themselves in tourists' shoes. That's the case, for instance, for Cascina la Famo, a renovated farmhouse in Piedmont now available as self-catering holiday accomodation.
"Piedmont is very popular among Americans, they love to come here," Gerald Smith, one of the owners, said. "But the problem is that since 2008, when the economic crisis began, banks have started charging higher fees for foreign currency exchange, so that it can now cost from $8 to $20 to make a transaction." Sometimes commissions can be higher still: "one of our customers was asked for $80 to make a transaction," Smith said.
One workaround is to use Bitcoin instead: as long as you pay directly, wallet-to-wallet, there are no fees. And even if you rely on an intermediary to convert bitcoins into euros — a lot of merchants in Europe use BitPay, for example — the commission is usually much lower than that charged by traditional banks.
For the time being anyway, it's a largely theoretical considation: even if Bitcoin is starting to gain traction among business owners in Italy, what's missing are the customers.
Requests for information
"We were perhaps the first in Italy to accept bitcoins for accommodation," Antonio Iodice of the Del Corso B&B in Naples said. "Until now we've received lots of requests for information, but very few bookings have actually been made this way. I think it's still too early to see widespread adoption: people prefer to hoard bitcoins right now, instead of spending them."
It's a attitude shared not only by customers, but by some owners as well. "I see bitcoins as an investment," says Marco Maltese of Trina's holiday house in Sicily. "I believe Bitcoin's value is bound to increase more and more, so I decided to accept payments in the currency in order to make something from it." For the time being, however, no guests have yet helped Maltese build his Bitcoin portfolio (but the house has only been open to holidaymakers for a few months).
Given the low volume of transactions, the wallet-to-wallet route is the method of choice for many Italian businesses."We don't expect a huge amounts of [Bitcoin] requests," Andrea Binetti of the Mercury Boutique Hotel in Sant'Antioco, Sardinia, says, "but we decided, at the beginning of 2014, to start accepting the currency in order to attract young tourists coming from abroad. If it gets a foothold, we'll contemplate whether to use an intermediary."
Using BitPay or a similar service it's also the simplest way to avoid problems with the taxman: the final payment is made in euros, and all a business owner has to do is to invoice. As for direct payments, Cimatti says, "you just convert the money at the current Bitcoin market value and give the receipt in euros. But the fiscal framework is still unclear."
The role of law
At the moment, the use of the digital currency is not regulated in Italy: there have been some proposals on the subject, but they were ditched after meeting with strong opposition.
However, it seems only a matter of time before some kind of regulation comes in. Among those trying to promote a law on the subject are Sergio Boccadutri, a member of the Italian parliament belonging to the Sinistra e Libertà leftist party.
In January, Boccadutri proposed an amendment to the 'Destinazione Italia' legislation which would have meant that for any Bitcoin payment of €1,000 or more, the payee account would have to be unequivocally identified.
The measure is intended to stop to the cryptocurrency being used by criminal organisations for money laundering. After receiving many comments and some criticism (some accused him of not fully understanding the nature of Bitcoin), the politician decided to shelve the proposal for the time being while consulting with various experts and stakeholders.
"Of course, the problem," Boccadutri told ZDNet, "isn't the hotels that decide to offer a room in exchange for bitcoins or restaurants or shops that do the same. And as long as the bitcoins aren't converted [into other currencies], there isn't any problem with it. The key point, rather, is regulating the role of the exchanges and helping businesses that are required by law to offer their products at a fixed price."
If someone exchanges a big bunch of bitcoins for, say, €1m, it's understandable that authorities want will want to know where that sum came from. On the other hand, if businesses have to sell directly in Bitcoins instead of just accepting them, they will have to find a way to work around the electronic currency's fluctuations.
"I don't want to criminalise the use of bitcoins," the MP said, "Quite the opposite, I want to help it spread. But in order to do that, we need a regulatory framework."