Potcoin to the rescue?
As the federal government laxes its laws regulating marijuana, banks may eventually let their guard down and begin accepting cannabis businesses as clients. Keeping that in mind, will Potcoin catch the eye of business owners or go up in smoke? Let us know what you think in the comments below.
The sale of recreational marijuana in Colorado has proved to be a major boon to the state’s economy. Despite the boom, or rather because of it, thieves have been robbing Colorado pot shops using guns, axes, a circular saw, and even bear mace. The vulnerability of cannabis shops has led one team to develop a digital currency for marijuana users: Potcoin.
Marijuana shops are having a tough time finding banks that will accept their money, despite recent government outlines on how banks should work with legitimate cannabis operations. What does that mean? These lucrative business owners deal with a lot of cash and can’t securely transport and deposit it into banks, leaving them more or less on their own. According to one report, a business owner spent $1 million in cash to construct for his operation. Morgan Carr, who runs Wellspring Collective Shop in Denver, hired a security firm to transport his cash to an undisclosed location. The danger is real. As Denver District Attorney Mitch Morrissey put it:
Currently 420 potcoins is equivalent to US2.51.
Potcoin was launched in January 2014 by three developers who hoped to eliminate the current cash-only policy many customers face at Colorado cannabis shops. Currently, potcoins are only accepted by several online vendors, including Bitcoin Seedstore, Smoke Cartel, and Chronic Star Medical.
“You hit a 7-Eleven, you’ll get 20 bucks,” he said. “You hit a dispensary, you’ll get $300,000. It’s only a matter of time before someone gets shot.”
Potcoin has a long road ahead of it if it wants to work its way into recreational or medicinal shops. So far, no shops in the Mile High State accept potcoins in exchange for marijuana. That’s not to say the currency isn’t trying: on April 20 two Potcoin ATMs were installed in Denver where users could deposit cash in exchange for potcoins.
If banks begin relaxing their policies and accepting marijuana customers, the future of Potcoin may be under threat. Already, Deputy Attorney General James Cole and the Financial Crime Enforcement Network have outlined their rules for banks when dealing with such businesses. The government asks that banks don’t deal with businesses that sell marijuana to minors, sell marijuana across state lines, and work with criminal enterprises, and that banks should monitor their customers closely to see their clientele.
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