Alderney Wants To Become A Financial Hub For Bitcoin

Island wants to mint physical bitcoins, which it sees as a pathway to financial independence

The Channel Island of Alderney wants permission to mint physical Bitcoins and become a hub for businesses using the electronic currency, which is not currently recognised by the UK government.

According to the Financial Times, Alderney first raised the possibility of creating a physical coin in the summer, after finance minister Robert McDowall met with Michael Parsons, a banker and adviser on Bitcoin.

The planned financial services hub would include exchanges, payments, services and physical storage of coins, and if the plan is adopted, Alderney would become the first jurisdiction to introduce a regulated environment for the currency, which is now valued above $1,000.

Alderney Bitcoin

Bitcoin (c) virtualmage, ShutterstockAlderney currently generates £40 million a year from online gambling, but must pay £37 million to Guernsey, on which it relies to provide public services for its 1,900 inhabitants. The Bitcoin proposals would not only provide a path to financial independence, but also diversify the economy on the island.

The Royal Mint has a longstanding relationship with Alderney and is currently involved with the project, while the team behind the proposals have been invited to the Treasury to discuss how a licensing agreement would work.

The island’s parliament would need to agree with the plans. If approved, this would be a major development for Bitcoin, which has struggled to be recognised by governments as a legitimate form of payment due to its association with money laundering and illegal goods.

Rising value

The UK government has held a number of meetings in recent months to listen to entrepreneurs, most of which say adopting the virtual currency would generate significant benefits for the UK.

Earlier this month, a US Senate committee ruled Bitcoin is a valid form of money and that online currencies were not only legal, but could make for more efficient commerce. This ruling was one of a number of events that have contributed to a dramatic increase in the value of Bitcoin, with early adopters reaping the benefits.

A 29 year-old Norweigan man was able to purchase a flat in central Oslo thanks to a small, forgotten investment in Bitcoin made in 2009, but spare a thought for James Howells, a Welshman who threw out a hard drive containing 7,500 Bitcoins, worth more than £4 million at today’s prices.

What do you know about Bitcoin? Take our quiz!