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based BTC China, operates. "In other words, the banks cannot perform direct, sought to define virtual currencies,
bitcoin-related services," he said. "Nothing really speaks directly to independent and bitcoin in particular, for the
exchanges or the banks' relationships to those exchanges." purposes of regulating them in the
fight against money laundering and
Instead, the PBC is attempting to keep the cryptocurrency from facilitating other illegal activities.
money laundering activities and destabilizing the RMB. "Bitcoins can be freely
used for online commerce as long as consumers recognize that they are taking Also in March, Amazon.com
all the risk. Bitcoin processors are allowed to continue as long as they are not integrated the bitcoin payment
deemed financial institutions," Waters said. functionality of Atlanta-based
Bitcoin's low cost paradigm BitPay Inc. for its Fulfillment-by-
Amazon web service that facilitates
The U.S. federal law enforcement community officially took notice of bitcoin distribution for merchants who sell
in March 2013 when the Financial Crimes Enforcement Network (FinCEN) goods on Amazon. BitPay said the
integration represented the first
move into large-scale e-commerce
for "companies wishing to accept
payments over the bitcoin peer-to-
peer payment network."

BitPay settles bitcoin transactions in
U.S. dollars. Waters equated BitPay's
process to dynamic currency
conversion, where exchange rates
are locked in at the time transactions
are made. Therefore, merchants
receive full value for a bitcoin
transaction worth $100 at the time
of the transaction, rather than $50
should the volatile currency lose half
of its value tomorrow, Waters said.

Waters believes bitcoin is here to
stay because it provides benefits to
vendors, merchants and consumers
alike. He said bitcoin is not costly
for consumers to exchange, can be
exchanged almost instantly and is
nearly universal as a worldwide
accepted currency.

He added that bitcoin payments
would also reduce chargebacks
for merchants because bitcoin
transactions are nonrefundable; nor
do merchants have to pay fees to
banks or other network operators as
they do to accept bankcards.

The bitcoin payment option can
be ideal for high-risk merchants
vulnerable to credit card fraud, and
for businesses in the small-ticket
market, such as e-book sellers,
where micro transactions as small as
a quarter can be conducted securely
via bitcoin payments, according to
Waters. Bitcoin is also attractive to
payment vendors because of its low
processing costs, he noted.

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