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Get your Bitcoin in cash: World's second Bitcoin ATM to open in Hong Kong

By Naomi Ng for CNN
January 7, 2014 -- Updated 0305 GMT (1105 HKT)
This file photo shows users waiting in line to use the world's first real Bitcoin ATM in Vancouver, Canada on October 29, 2013.
This file photo shows users waiting in line to use the world's first real Bitcoin ATM in Vancouver, Canada on October 29, 2013.
STORY HIGHLIGHTS
  • World's second Bitcoin ATM to open in Hong Kong by the end of January
  • Customers can buy or sell Bitcoin from the machine in just a few minutes
  • Company CEO: "I think we're going to unleash the power of Bitcoin"
  • However, not all Asian governments recognize Bitcoin as a real currency

Hong Kong (CNN) -- The world's second Bitcoin ATM is due to land in Hong Kong by the end of this month, according to U.S. based software company Robocoin.

The machine, available for sale to individual operators such as banks and private entrepreneurs, allows users to buy or sell Bitcoin in just a few minutes.

The process should be much faster than setting up an account on an exchange or via mobile apps and computers which could take a few days for account verification.

The advent of Bitcoin ATMs is seen as a step towards bringing the digital currency into the real world.

"It removes all the pain and barriers of entry to buying Bitcoin on an online exchange," said Robocoin chief executive Jordan Kelley.

"Our goal as a company is to make the acquisition truly grandma friendly," he added.

READ: What is Bitcoin?

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The virtual currency has generated lots of media attention in China where investors have helped drive the price up to dramatic highs above $1,000.

"I think we're going to unleash the power of Bitcoin. It opens a virtual money portal where people can send money to and from," said Kelley.

This is how it works:

Customers must choose to either buy or sell Bitcoin.

Let's say you want to make a withdrawal from your Bitcoin wallet. After choosing an amount of cash you'd like to withdraw, the software installed in the ATM generates a code which you have to scan with your smartphone.

Simultaneously, the machine also produces a receipt.

Following a confirmation from the Bitcoin network to your phone, you can then scan the code on the receipt at the kiosk, which then prompts the ATM to spit out the allotted amount of cash.

The machine is also equipped with a hand scanner that creates a biometric authenticated identity as an anti-money laundering measure.

Casper Cheng Tsz Chun, a Hong Kong Bitcoin enthusiast, said the ATM would work a bit like a vending machine "for buying and selling virtual goods (Bitcoin) instead of physical goods like a can of soda."

READ: 8 things you can buy with bitcoins right now

Robocoin's first Bitcoin ATM launched in Vancouver in October, and after a month of operation, transactions have totaled 1 million Canadian Dollars ($942,000) in total transactions, according to the company.

Kelley said the company has already sold 50 ATMs to other operators worldwide but they are not yet in operation.

The company said it chose Hong Kong as the next place to launch its cash machine for the virtual currency because it "responds well to technological innovation."

Kelley declined to disclose where the ATM would be located.

I think we're going to unleash the power of Bitcoin
Jordan Kelley, Robocoin CEO

Not every government in Asia is ready for a Bitcoin ATM.

Taiwan's Financial Supervisory Commission (FSC) and Central Bank released a joint statement on their website on Monday stating it does not recognize Bitcoin as an accepted form of currency.

The installation of Robocoin Bitcoin ATMs will be prohibited said Tseng Ming-chung, FSC chairman in an interview with Taiwan's Central News Agency.

"Bitcoin is not real currency and banks cannot receive or provide it. Installing ATMs require the authorization of the FSC, but it will not be approved, thus it is 'impossible' for Bitcoin ATMs to enter or appear in Taiwan," Central News Agency reported.

The statement also warned institutions against the risk of investing in Bitcoin because of the extremely volatile price.

China's central bank issued new rules in December that prohibited financial institutions from dealing in the digital currency. While it did not outlaw individuals from owning Bitcoin, it specifies that it is not to be considered a currency.

Despite the setback, Robocoin's chief executive said he still firmly believes China will come to accept Bitcoin.

"Citizens around the world love Bitcoin. The Chinese are very pragmatic in their approach, they just want to make sure they have a very good understanding of the market and the usage," he said.

Kelley revealed that Robocoin has begun talks with several operators in China that are reaching out to the government and local regulators to "educate" them about the value and potential of the Bitcoin market.

READ: Inside Hong Kong's biggest Bitcoin mine

CNN's Charles Riley contributed to this story.

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