Bitcoin-Central is set to become the first Bitcoin exchange to operate as a real bank, thanks to new approvals from French regulators. Run by Paymium, Bitcoin-Central partnered with two French companies — the payment processor Aqoba and bank Credit Mutuel — to create a payment service based on Bitcoins. Customers will be able to deposit their funds into the service in either euros or Bitcoins, and they will be able to easily convert the funds between the two currencies.
Thanks to the approvals from authorities in France, deposits made in euros will benefit from insurance provided by the Garantie des dépôts, a French version of the FDIC in the US. Bitcoin-Central accounts will also be tied into the complete French banking system, which allows for direct deposit and other modern banking conveniences. A debit card, which will allow customers to spend their Bitcoins at retails establishments, is also in the works. It's not yet clear exactly when the service will launch, though approval for it is the key first step to getting it off the ground.
Bitcoins are a digital form of currency that have had trouble gaining traction in mainstream culture, thanks to a number of factors. Fraudulent activity with Bitcoins has caused earlier Bitcoin exchanges to shut down, the US-based Tradehill nd BitFloor exchanges being the most notable. Also, the rather nebulous way in which Bitcoins are created (they are "mined" by computers as opposed to being printed or produced by official government agencies) makes it difficult for the average consumer to put their trust in the currency. But gaining integration with traditional banking methods is an important step towards bringing Bitcoin to the masses, and it will be interesting to see if this venture by Bitcoin-Central will be able to shake off fraud concerns and become a successful operation.