CoinTap Card Applies a Prepaid Model to Bitcoin Purchasing

Bitcoin Ventures Inc.'s new CoinTap allows consumers to obtain bitcoins by purchasing a stored-value card in retail stores.

The product resembles cards such as Green Dot's MoneyPak and PaPal's My Cash Card, which allow cash users to reload prepaid cards or PayPal accounts by purchasing plastic reload cards at convenience stores.

The CoinTap product addresses the convoluted process of obtaining the virtual currency Bitcoin. Many bitcoin owners purchase the currency by making a bank transfer to an online exchange, but this isn't an option for the unbanked.

With a CoinTap reload card, "buying bitcoins [is] now as uncomplicated as buying a loaf of bread," says Ashley Fulks, chief science officer at Bitcoin Ventures, in an Aug. 22 press release.

The gift cards are denominated in dollars, and the stored funds can be used on the Bitcoin Ventures' website to purchase bitcoins. The current exchange rate on Mt. Gox, the largest Bitcoin exchange, is about $123 per bitcoin.

Bitcoin Ventures is currently seeking partnerships around the world.

"The Bitcoin community is very supportive of emerging technologies and has contacted us with open arms," Fulks says. "I know a lot of people want to make it easy to get bitcoins and CoinTap is here to help."

While the U.S. regulatory environment has been tough to navigate for Bitcoin businesses, Canada and some European nations are taking a more hands-off approach.

Another option that would allow the underbanked to obtain bitcoins is the upcoming Lamassu Bitcoin Machine, a vending machine that allows consumers to deposit cash to receive bitcoins electronically.

BitInstant announced the development of a Bitcoin debit card a year ago, but the product never materialized. BitInstant's card would allow bitcoin owners to spend bitcoins at the point of sale by swiping a MasterCard debit card.