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December 23, 2013 • Issue 13:12:02

Payments 2013: Abuzz with bitcoin,

mobile and prepaid

Shortly after, on Dec. 6, the People's Bank of China banned
banks in that country from handling bitcoin transactions,
and said it was looking into a regulatory scheme for virtual
currencies.

But there remain plenty of bitcoin champions. Bank of
America Corp. Analyst David Woo, in an early December
interview on CNBC, said bitcoin has "clear potential
for growth." Woo, who heads BofA's global rates and
currencies research, also predicted bitcoins could achieve
a market capitalization of $15 billion.

Meanwhile, the first ATM to dispense cash for bitcoins was
installed in a coffee shop in Vancouver. B.C., Canada in
October 2013. Operators of the ATM reported that in the
first week alone, the machine handled 348 transactions.
And in early December, it was widely reported that
a Lamborghini dealership in California accepted 91.4
By Patti Murphy bitcoins for a $103,000 automobile.
ProScribes Inc.
The creators of bitcoins insist the virtual currency is
s we close the books on 2013, it's safe to say inflation proof, since only a limited number can be created.
we've enjoyed another dynamic year in the But there has been plenty of price volatility. In the summer
payments sphere. Optimism has reigned at of 2013, the cost of a single bitcoin was less than $100; by
A industry tradeshows; established players and Dec. 4, the price, at over $1,147, rivaled that of an ounce of
newcomers, alike, have been innovating; and payment gold. Following the Bank of China's decision, bitcoins fell
pros have been exploring developments they find com- to under $800.
pelling. Among those, mobile payment options, prepaid
products and bitcoin have received significant attention.
Contributed articles inside by:
Bitcoin, one of the most unusual payment trends in recent
memory, is still playing out. It has taken the lead among
an emerging group of virtual currencies (that is, software Brandes Elitch ........................................................ 32
code) that bypass the regulated financial system. Dale S. Laszig ....................................................... 44
Jeff Fortney ........................................................... 46
Some experts see it as a modern-day Ponzi scheme. Tom Waters .......................................................... 48
Former Federal Reserve Board Chairman Alan Sean Berg ............................................................. 50
Greenspan, in an interview with the Bloomberg news
service in November 2013, said the rapid rise in the value TOC on page 3
of bitcoins (900 percent in about three months) is nothing
more than a "bubble,"and that bitcoins have no "intrinsic
value."

Continued on page 39