Bitcoin Is as Legit as Paypal Now, in at Least One Country

The occasionally frightening virtual currency, which doesn't tend to believe in government regulation, just got itself some.

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Bitcoin, the occasionally frightening virtual currency that doesn't believe in government regulation, just got itself some. One of its exchanges, Bitcoin-Central, has received approval from France's government to operate as a payment service provider there, PayPal-style. With that relationship comes some insurance protection that should help get people trusting Bitcoin again. Before now, when things like $250,000 heists went down, these exchanges didn't have any government back-up to pay back users' stolen funds. As a PSP, the money stored with Bitcoin-Central will get backed by the same European compensation laws as money held in normal banks.

That should make signing up a little less terrifying of an experience for people who don't want to watch their money be subject to hackings and fraud, a common but hard-to-track occurrence in the Bitcoin world. Often, these heists amount to no small sum. At this point one bitcoin is worth about $13 U.S. dollars. Or as one Bitcoin forum user put it:

In addition to protections from the French government, each customer now gets his own debit card and will be able to transfer funds between banks a possibility, making transferring virtual money into real dollars a lot easier. Everything just becomes more seamless.

But with all that cushy government regulation, comes all that evil government regulation that is the antithesis of Bitcoin. David Francois, CTO of Paymium, who worked with Bitcoin Central on the deal, just barely acknowledges that little caveat in his announcement post. "Some people might argue that regulation is a bad thing. We respect this opinion, but we'll have to agree to disagree," he writes. So far, most Bitcoin forum users are excited about the move, despite this little issue. But some seeds of grumbling have already bugun. "This is really cool well done guys but..... I don't like that taxpayers bail out losses. why cant a private insurance company take on this risk?" asked Bitcoin Forum user jaminuit. If this gets more people to accept and use the currency, however, do the dissenters still matter?

This article is from the archive of our partner The Wire.