Rarely out of the financial pages, virtual currency “bitcoin” is beginning to gain limited acceptance amongst traditional retailers, with some specialist food and drink outlets now able to accept digital money.
But the attractiveness of an untraceable payment method that is free from regulation or supervision, and knows no international or political borders remains, for many, exactly the reason to steer clear.
Allegations of connections with criminal gangs have done little to boost bitcoin’s image, whilst storing a virtual wallet on a computer hard drive magnifies the risks from a failed or lost laptop for even the most law abiding consumer. Such are the growing pains for a new payment method.
Risks aside, few can doubt the rise in bitcoin’s popularity, and any retailer that fancies dipping a digital toe in the world of peer to peer payments needs to consider whether it is a good fit for its business.
Currency volatility is well known to those that trade internationally, but the frequency of wild gyrations in bitcoin values are rarely seen in the mature foreign exchange markets. With hedging virtually non-existent, holding bitcoins without offsetting liabilities exposes you to a huge risk.
Although the US is making some progress, there is currently little in the way of a distinct regulatory framework in the UK. The traditional payments system relies on confidence, underlined by law, to function effectively and huge problems could result without these.
For the time being Tolhurst Fisher will not be accepting bitcoin payments, but if your business requires advice on collecting or making payments please contact our commercial department by emailing commercial@tolhurstfisher.com for further information.
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