Hong Kong's first bitcoin shop to open this week in Sai Ying Pun

Outlet will turn cash into virtual currency, while three other firms pursue plans for ATMs

PUBLISHED : Sunday, 23 February, 2014, 5:11am
UPDATED : Monday, 24 February, 2014, 10:12am

Hong Kong's first retail outlet for the virtual currency bitcoin will open on Friday.

The 400 sq ft shop in Sai Ying Pun, in Hong Kong Island's Western district, is the brainchild of Asia Nexgen Bitcoin Exchange.

"The biggest issue people have right now is buying the bitcoin. People have to put money in, trade it through an exchange online," which takes time, said Lo Ken-bon, the co-founder and chief executive of Asia Nexgen.

"Now, you walk into the store, hand over your cash and send the bitcoin to your digital wallet."

Bitcoin enthusiasts will be asked to provide an identity card and proof of address, to comply with Customs and Excise rules on money laundering.

Lo is not the only one in Hong Kong hoping to cash in on the bitcoin craze; a trio of start-ups are racing to install the city's first bitcoin automated teller machine.

Evan Griffin, a spokesman for Bitcoin Group HK, said his firm would import two ATMs from Portugal to be installed at the International Finance Centre and Wanchai Computer Centre.

Another firm, Hong Kong Bitcoin ATM, will install a machine in Mong Kok, with more to come if it is a success. Each ATM costs US$4,000 to US$5,000.

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Las Vegas-based bitcoin- teller manufacturer Robocoin originally planned to launch a machine last month, but its plans have been put on hold for unknown reasons.

As with all bitcoin enterprise, the legality of the operation remains blurry. "We will be operating it as a vending machine. There's no exchange of money involved," Griffin said.

A source from Customs and Excise said officials were considering which government department was responsible for regulating bitcoin-based activity.

The government has stated that bitcoin is not a real currency and businesses should have proper safeguards in place to prevent money laundering and financing of terrorism.

"You should assess the extent to which your services are vulnerable," the department said in a circular released by the Money Service Supervision Bureau on January 30. "This issue is especially relevant where emerging technological developments may facilitate anonymity."

Meanwhile, the value of a bitcoin remains volatile. Yesterday, on the world's largest bitcoin exchange by volume, Mt Gox, the price of a single coin plummeted to below US$100. Prices on other exchanges, including Asia Nexgen and China's BTC, were also down. The average price of a bitcoin is about US$550.