Bitcoin-Central, first exchange licensed to operate with a bank. This is HUGE

[davout]

Yes, I was thinking of you as purely a bank with specialist knowledge of Bitcoin - that would make you very attractive to a lot of businesses in the Bitcoin world as you have already done all the legal legwork.

You know, it's just the beginning

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[becoin]

mtgox could open an account with us, but not to store their user's funds. to store their own funds would be OK.

[/quote]
From a bank point of view there is no difference whatsoever!

[tionil]

In 20 years the situation will be the same. Because some guys made a bridge between dollars and bitcoins. Because they hid a wallet with coins in a bank vault and gave ppl paper money. Because they made Bitcoin an instrument to store wealth.

+1

[davout]

From a bank point of view there is no difference whatsoever!

A financial institution has a duty to ensure the origin of funds deposited with it.

[Gabi]

This is a great news!

And the fact that it's in Europe make it much better, since there aren't a lot of exchanges here 

[prezbo]

This is a great news!

And the fact that it's in Europe make it much better, since there aren't a lot of exchanges here  

This. Also, if it will eventually be possible to exchange btc for eur on the fly, this will be great for merchants in europe.

[guruvan]

Congratulations davout! This is very good news, indeed.

Mike Hearn makes some very significant points above. I can't think of any EU bank that I can get an account with as a US citizen online (at least) - generally for the reasons Mike stated. In pretty much every financial area, the US believes that all worldwide businesses that server its citizens are subject to its laws. (pretty damned arrogant, but...it is what it is)

Anyhow....The tweet volume for this news was pretty huge. Great work!

[dancupid]

From a bank point of view there is no difference whatsoever!

A financial institution has a duty to ensure the origin of funds deposited with it.

I have a bank account and if I give someone my account number (IBAN etc) they can transfer funds to me. The bank doesn't know anything about the person sending the money (they are not a member of my bank)
Does a bank account with you function in exactly the same way as any normal bank account?
Can I link my paypal account to my bank account with you?
Can I set up a monthly direct debit to pay my bills?
Can my employer pay my wages directly into my account?

[Vitalik Buterin]

 Congratulations! Even if some Bitcoin users don't want to be getting closer to the traditional regulated banking system, I'm glad that people and businesses have a choice.

Just a few questions:

1. What are the specific regulations in France around letting foreigners open a bank account? I found http://www.french-property.com/guides/france/finance-taxation/banking/opening-an-account/ this, which suggests that it is legal for non-residents to have accounts, but the page also lists some restrictions, like the need to maintain a minimum deposit and transfer limits. Is the information on that page accurate, and if so does it apply to you?

2. What exactly is the difference between a verified account and a non-verified account - specifically, how much CAN a non-verified account do? Is it only good for speculative/arbitrage trading? Can it deposit or withdraw USD? Are there lower limits?

3. What did you actually have to do to get licensed for this? What did "talking about Bitcoin to our regulating bodies, the Banque de France, the ACP (French equivalent of the American SEC), TRACFIN (AML French supervising body) etc" entail? Have any of these agencies established any kind of concrete stance or policy on Bitcoin as a result of your discussions with them? And, now that you've done all that, how difficult will it be for another exchange (eg. MtGox) to also partner up with a PSP and do the same thing?

[notme]

From a bank point of view there is no difference whatsoever!

A financial institution has a duty to ensure the origin of funds deposited with it.

I have a bank account and if I give someone my account number (IBAN etc) they can transfer funds to me. The bank doesn't know anything about the person sending the money (they are not a member of my bank)
Does a bank account with you function in exactly the same way as any normal bank account?
Can I link my paypal account to my bank account with you?
Can I set up a monthly direct debit to pay my bills?
Can my employer pay my wages directly into my account?

The bank knows what bank it came from and the account it came from.  It is the other bank's responsibility to know their customers and the trail will be followed in an investigation.

[dancupid]

From a bank point of view there is no difference whatsoever!

A financial institution has a duty to ensure the origin of funds deposited with it.

I have a bank account and if I give someone my account number (IBAN etc) they can transfer funds to me. The bank doesn't know anything about the person sending the money (they are not a member of my bank)
Does a bank account with you function in exactly the same way as any normal bank account?
Can I link my paypal account to my bank account with you?
Can I set up a monthly direct debit to pay my bills?
Can my employer pay my wages directly into my account?

The bank knows what bank it came from and the account it came from.  It is the other bank's responsibility to know their customers and the trail will be followed in an investigation.

Yes I understand - and if it functions as a bank in this way then it is a bank in the accepted sense of the word. Just looking to be 100% sure.

[dserrano5]

Anyhow....The tweet volume for this news was pretty huge. Great work!

It also made #9 (at least) in HN.

[evoorhees]

I hate central bank charades as much as the next guy, but how the hell is bitcoin supposed to grow without interfacing with any other financial systems?

That's a great question for Satoshi! Perhaps, he will make a cameo, and explain how he planned for the Bitcoin infrastructure to avoid being bought out by the current banking systems he identified as the problem in the beginning. Maybe he already explained; have to search his writings again...

...unless of course, he was a banker trying to make a killing by starting the whole thing...  Nah; that just conspiracy talk... 

   Nothing has been "bought out by the current banking system."  To even suggest that Bitcoin can be bought out betrays a gross misunderstanding of how it operates. This French exchange, to the extent that it has partnered with a banking institution (again, not the same as being "bought out") has simply given you one more option in the manner by which you utilize Bitcoin. No options have been taken from you, only given to you.

And as I said before, integration with the traditional financial world is A) inevitable, B) important, and C) not something to be feared. Everywhere integration happens, Bitcoin becomes more useful, and more valuable. Imagine if, today, Bitcoin was integrated with every financial system in the world. You'd buy your gas with it, you'd pay your mortgage with it, and you'd be paid by your boss with it. By this point, Bitcoin will have won, and we can all open a bottle of champagne (paid for with BTC) and celebrate, because the fiat system will have  collapsed.

We should be encouraging integration wherever possible, and indeed that is what I spend much of my days trying to accomplish (90% of what BitInstant does is build these integrations).

I'm thrilled with this new development in Europe, it's amazing news, and wonderful precedent.

[evoorhees]

I don't understand people who dismiss this news.

Half-measures == Half-reached goals.

To get anywhere, you have to get halfway there first. Unless you're a quantum particle I suppose

[evoorhees]

The reason some people are querying that you allow US customers is FATCA. It isn't correct that you aren't subject to US regulations. Yes, obviously, in a reasonable and just world that would be the case, however the US is trying to change that as hard as possible as it appears that they are succeeding, FATCA implementation is proceeding at the moment - though it's not yet in force.

FATCA forces non-US financial institutions to follow US laws in two ways. Firstly, they are busy signing agreements with different governments that will mean financial institutions are forced to provide customer data to the IRS. These are called "inter-governmental agreements", and yes France is signing one:

  http://www.stepjournal.org/journal_archive/2012/step_journal_june_2012/fatca_in_the_frame.aspx

The second way is far nastier and more insidious. They are planning to impose a recursive "passthru" 30% withholding tax. That means if you do business with the USA you must follow US law and if you don't, your US assets will be taxed at 30% (essentially bankrupting you or making you uncompetitive). But any business that comes into line because of that must also impose the 30% tax on any other financial institution they deal with, even if that institution does not interact with the US in any way shape or form! Because the financial system is a fully connected graph, this essentially means that US law spreads through it like an infection and eventually every financial institution will be forced to comply or face crippling sanctions from other financial institutions they interact with. This happens even in cases where US law conflicts with local law.

Dave, as you're the one exposed to this stuff, please make super sure you have fully researched this topic. The US will force you to follow its rules whether you like it or not and the French government will not save you - this is not a paranoid hypothetical but a phenomenon that is already happening. Your best bet is to do what all other financial institutions are doing and deny access to "US persons"  (citizens, residents and people who have held a green card in the last 10 years, iirc). This doesn't exempt you from FATCA but it minimizes the amount of paperwork and reporting to the IRS you'll have to do.

Mike Hearn... you're such a smart guy, but everything you say depresses me

[justusranvier]

The reason some people are querying that you allow US customers is FATCA. It isn't correct that you aren't subject to US regulations. Yes, obviously, in a reasonable and just world that would be the case, however the US is trying to change that as hard as possible as it appears that they are succeeding, FATCA implementation is proceeding at the moment - though it's not yet in force.

FATCA forces non-US financial institutions to follow US laws in two ways. Firstly, they are busy signing agreements with different governments that will mean financial institutions are forced to provide customer data to the IRS. These are called "inter-governmental agreements", and yes France is signing one:

  http://www.stepjournal.org/journal_archive/2012/step_journal_june_2012/fatca_in_the_frame.aspx

The second way is far nastier and more insidious. They are planning to impose a recursive "passthru" 30% withholding tax. That means if you do business with the USA you must follow US law and if you don't, your US assets will be taxed at 30% (essentially bankrupting you or making you uncompetitive). But any business that comes into line because of that must also impose the 30% tax on any other financial institution they deal with, even if that institution does not interact with the US in any way shape or form! Because the financial system is a fully connected graph, this essentially means that US law spreads through it like an infection and eventually every financial institution will be forced to comply or face crippling sanctions from other financial institutions they interact with. This happens even in cases where US law conflicts with local law.

Dave, as you're the one exposed to this stuff, please make super sure you have fully researched this topic. The US will force you to follow its rules whether you like it or not and the French government will not save you - this is not a paranoid hypothetical but a phenomenon that is already happening. Your best bet is to do what all other financial institutions are doing and deny access to "US persons"  (citizens, residents and people who have held a green card in the last 10 years, iirc). This doesn't exempt you from FATCA but it minimizes the amount of paperwork and reporting to the IRS you'll have to do.

Mike Hearn... you're such a smart guy, but everything you say depresses me

The silver lining of all this is that these kinds of rules infecting the legacy financial system only serve to make Bitcoin more valuable as a method of avoiding them. In that sense those laws become a subsidy that makes Bitcoin even more profitable to adopt.

[JackH]

The reason some people are querying that you allow US customers is FATCA. It isn't correct that you aren't subject to US regulations. Yes, obviously, in a reasonable and just world that would be the case, however the US is trying to change that as hard as possible as it appears that they are succeeding, FATCA implementation is proceeding at the moment - though it's not yet in force.

FATCA forces non-US financial institutions to follow US laws in two ways. Firstly, they are busy signing agreements with different governments that will mean financial institutions are forced to provide customer data to the IRS. These are called "inter-governmental agreements", and yes France is signing one:

  http://www.stepjournal.org/journal_archive/2012/step_journal_june_2012/fatca_in_the_frame.aspx

The second way is far nastier and more insidious. They are planning to impose a recursive "passthru" 30% withholding tax. That means if you do business with the USA you must follow US law and if you don't, your US assets will be taxed at 30% (essentially bankrupting you or making you uncompetitive). But any business that comes into line because of that must also impose the 30% tax on any other financial institution they deal with, even if that institution does not interact with the US in any way shape or form! Because the financial system is a fully connected graph, this essentially means that US law spreads through it like an infection and eventually every financial institution will be forced to comply or face crippling sanctions from other financial institutions they interact with. This happens even in cases where US law conflicts with local law.

Dave, as you're the one exposed to this stuff, please make super sure you have fully researched this topic. The US will force you to follow its rules whether you like it or not and the French government will not save you - this is not a paranoid hypothetical but a phenomenon that is already happening. Your best bet is to do what all other financial institutions are doing and deny access to "US persons"  (citizens, residents and people who have held a green card in the last 10 years, iirc). This doesn't exempt you from FATCA but it minimizes the amount of paperwork and reporting to the IRS you'll have to do.

Mike Hearn... you're such a smart guy, but everything you say depresses me

The silver lining of all this is that these kinds of rules infecting the legacy financial system only serve to make Bitcoin more valuable as a method of avoiding them. In that sense those laws become a subsidy that makes Bitcoin even more profitable to adopt.

I would just do as Mike says and not get yourself into more trouble that needs be here in the beginning. You will grow, just dont grow too fast to follow the growth and for some weird reason see yourself in a courtroom in New York in 5 years for money laundry. All the best!

[Rassah]

In a grocery store I pay with dollars coz noone accepts bitcoins. In 20 years the situation will be the same. Because some guys made a bridge between dollars and bitcoins. Because they hid a wallet with coins in a bank vault and gave ppl paper money. Because they made Bitcoin an instrument to store wealth.

Baby steps. First the merchant accepts a card that converts BTC into dollars. From there it's just a tiny step for the merchant to use his own service that accepts BTC and converts it into dollars (like BitPay). This would be good for the merchant, because instead of being locked into VISA or MasterCard, the merchant can accept almost-fee-free BTC transactions, and chose from a very large selection of competing exchange services to convert the money for him. After that it's just another tiny step to simply keep BTC.

[fornit]

i thought while davout is still reading this thread i might as well make a proposal for a very simple functionality. its really very simple so its probably already planned anyway, but maybe not 

so, what i would like to have is the option to do transfers in all supported currencies directly without converting btc manually first. say, for example i need to pay someone 27€. i just fill out a standard (sepa?) form with the account information and 27 in the value field, select euro as the currency and there is an automatically updating field somewhere saying
"this will deduct 2.554345679 btc form your account (exchange rate 1 : 10.5423408)"
click ok, done. one step, no euro dust on my account, no extra hassle. its basically like euro doesnt really exist or is just a unit like converting feet to meter.

doing it like that without prior manual calculation and conversion would make it really fast and convenient and cool.

[Pontius]

I guess you are pretty busy right now I'd like to know how long your KYC verification takes?