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Singapore’s first merchant to accept bitcoin: Artistry

Caroline Ng | Aug. 5, 2013
Artistry trials the uncharted waters of bitcoin payments, challenging its status-quo in the city-state.


Get half a pint of beer for 0.09 BTC, the equivalent of S$12 (5 August).

Avant-garde is the name of the game at Artistry. From showcasing exhibitions of emerging artists to serving homegrown coffees, the art gallery cafe has become Singapore's first brick and mortar store to accept bitcoins as a payment.

As a digital currency, bitcoin is used to make peer-to-peer payments with as little as zero fees, without interference from governments or banks.

The cafe started turning bitcoins into rounds of drinks, albeit unofficially, on 10 July and has since made over 20 transactions but raking in over 20 percent in profit just from the rise of its value.

"Once we get clarification from the central bank and tax authorities regarding accounting purposes, we will be able to officially roll out bitcoins," said Pashant Somosundram, owner of Artistry.

While adoption is trickling leisurely for Artistry, new bitcoin services are popping up daily around the world. In fact, small businesses are driving the nascent technology.

"Unlike large corporations who have a mutual interest in maintaining status quo, SMEs have more to gain because they can increase their margins by reducing fees to institutions," said Philip Mockridge, co-founder of Squash Passion, who has also started accepting bitcoins. 

Although bitcoin seems to be gaining traction by such pioneering businesses, governments and banks have historically been slow to react to new digital trends.

Currently, virtual currencies do not fall under the regulatory ambit of Monetary Authority of Singapore - the Current Act only regulates legally tendered bills.

Banks also have little incentive to change the system to compete fairly in the market.

"The problem in today's economy is that you cannot keep money outside the banking system," said Luv Khemani, founder of Singapore's only bitcoin exchange, FYB-SG.

"So money is guaranteed to be stuck in the banking system, allowing banks to leverage up many times - fractional reserve banking - than would be possible in an open system as there is little fear of a bank run when money cannot leave the system."

As a decentralised currency, bitcoin is designed to bypass governments and banks.

This means if bitcoins were to become a widely accepted currency one day, the power of governments and banks could be diluted unless agreements can be made to achieve a win-win situation.

But skeptics are reserving their doubts as to whether governments might be willing to bow to the disruptive technology but expecting instead a clampdown.

Last week, Thailand has become the world's first country to issue a preliminary ruling to render using the cryptocurrency as illegal. Bank of Thailand has also refused to give a license to Bitcoin Co. Ltd, a Bangkok-based exchange, which it needs to operate lawfully.

 

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