Fah Thai March 2014 - page 92

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cryptocurrency
90
FAHTHAI
B
itcoin. It was arguably the most overused
word of 2013, though not without reason.
After all, it’s the digital-only currency created
by complex equations that went from being
the payment method of choice for online drug
buyers to becoming the financial story of the year as the
value of one coin rose from as little as US$13.50 to over
US$1,200. Who could resist?
To its detractors, bitcoin is unregulated, volatile and
risky. Think about it: banks are insured against loss but
should your online “wallet” containing coins get hacked,
there’s little that could be done. But to its supporters,
bitcoin is the libertarian dream: a truly apolitical,
decentralised, global e-currency. It’s neat, virtual and largely
untaxed (at least currently). It’s little wonder that the tourist
industry sees bitcoins as an opportunity.
Last year, entrepreneur Richard Branson announced that
anyone with a spare US$250,000 in bitcoins could purchase
a seat on Virgin Galactic’s space flights. Online travel
agents such as Simply Travel and BtcTrip suddenly
made it possible to book flights anywhere – and,
in the case of the former, hotels and cars – using
bitcoins. And at the time of writing, Hong Kong
is set to unveil the world’s second bitcoin ATM,
enabling users to swap cash for the digital-only
currency and vice-versa.
For tourists, bitcoins offer freedom, says Tomas
Forgac, the Singapore-based founder of Btcpos.
com, a company helping brick-and-mortar
businesses to process bitcoin payments. “Given
sufficient adoption, the advantages are obvious:
no more exchanges of cash from one currency
to another, no more foreign ATM withdrawal
fees or currency conversion charges in the case
of card payments. This sort of set-up used to be
provided by the free market in the gold and silver
era and it’s been taken from us by the coercive power of
governments and central banks.”
But it may be this very ideology that makes Asia an
especially tough nut to crack for the digital-only currency.
In the past 12 months, both the Thai and Taiwanese
governments have made bitcoin transactions illegal on their
soil, China has forbidden its banks from dealing in bitcoins,
and Malaysian, Hong Kong and Singaporean regulators
have been queuing up to issue investor warnings. Clearly,
there’s work to be done if uptake is to grow beyond profit-
seeking private speculators to the point that bitcoins prove
a boon to Asian tourism.
On the street is where it counts for tourists, and
Singapore has proved to be among the most adaptable of
Asia’s markets, with a growing cadre of cafés, bars and
restaurants hopping on the bitcoin bandwagon. Prashant
Somosundram, owner of café-gallery Artistry on Jalan
Pinang, was among the first in the country to adapt, taking
around 70 digital payments between July 2013 and the
turn of the year. “Ease of transaction” is a plus, he says,
though he feels that efforts to further popularise bitcoins
hinge on resolving issues of “technical vulnerability,
volatility and accountability”.
Other Singapore businesses soon followed suit: the likes
of Singapore microbrewery Hospoda began accepting
bitcoin last October. In just a few months it rang up
50 transactions, CEO Anton Gorog says, with tourists
accounting for about 30% of that figure. For small-business
owners especially, a select but loyal customer base makes
the currency an enviable proposition, as does the lack of
transaction fees.
However, in January this year the Inland Revenue
Authority of Singapore outlined plans to tax bitcoin
transactions as a “supply of services”, much like a barter.
On the positive side, doing so puts the country ahead
of the rest of Asia (plus most of the world) and implies
a tacit approval from above that is likely to encourage
enthusiasts. On the other hand: “This won’t necessarily
slow down adoption of bitcoin in Singapore,” Forgac
says. It just makes it more complicated or more expensive
for merchants.”
So what of the tourists themselves? Late last year,
American newlyweds Austin and Beccy Craig embarked
on what would become a 100-day mission to live
using only bitcoins, filming their progress as part of a
documentary (
. Having figured
out how to pay their rent, buy groceries and achieve
“normalcy” in their hometown of Provo, Utah, the couple
hit the road, visiting cities with strong bitcoin communities
such as New York, Stockholm and Berlin, before wrapping
up their odyssey in Singapore.
“To its supporters,
bitcoin is the libertarian
dream: a truly apolitical,
decentralised, global
e-currency”
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