Alderney sets out plans to mint physical Bitcoins

The channel island of Alderney is planning to mint physical versions of the Bitcoin virtual currency.

According to a Financial Times report, the small island off the coast of France has been developing the plans since the summer, and has been in talks with the UK Treasury and the Royal Mint to discuss minting the coins.

The newspaper reported that finance minister Robert McDowell had met with Michael Parsons, an advisor on Bitcoins.

If successful, the project would also include exchanges, payments, services and the physical storage of the coins. The island would also be the first in the world to have a regulated environment for the virtual currency.

The move would help it lessen its dependence on neighbouring island Guernsey.

Alderney runs a lot of online gambling websites from which it earns around 40 million a year. It pays Guernsey 37 million in fees to provide it with public services.

The plan has yet to be voted on by the island's parliament and legislation would be needed to finish the project.

If minted, the physical Bitcoins would contain gold to the value of 500. If the value of Bitcoins collapsed, owners of the coins could sell them on for their gold content.

The price of Bitcoins has exploded over the last 12 months, with each one worth in excess of $1,000.

Bitcoin has struggled to gain mainstream acceptance, though, as the virtual currency has been associated with illegal goods and services.

As reported by IT Pro, security researchers have discovered an application that uses a computer's resources to mine Bitcoins but does not share the rewards with the user.