Microsoft Jumps Aboard Bitcoin Bandwagon

Microsoft has revealed it is now accepting payments made by Bitcoins.

But questions remain over the popularity of the virtual currency, with new research suggesting that adoption rates for Bitcoins have stalled.

Virtual Cash

Microsoft’s decision to accept Bitcoin means it joins other companies already accepting the currency including PayPal. Rivals such as Google and Apple however have yet to accept the virtual currency.

The decision means users can now the virtual currency to purchase apps for their Windows Phones, or games and videos for the Xbox gaming console, and even other Windows-based software.

Microsoft quietly revealed the decision on its payments information page, which detailed how American users now have the option of adding money to their account with bitcoins.

“You can now use Bitcoin to add money to your Microsoft account,” said Microsoft. “Once you add money to your Microsoft account, you can use it as a payment option to buy apps, games, and other digital content from Windows, Windows Phone, Xbox Games, Xbox Music, or Xbox Video stores.”

Redmond later officially revealed the decision in a blog posting by Microsoft’s Athima Chansanchai, in which it was revealed that it had teamed up bitcoin processor BitPay.

“If you are a person who uses bitcoin you know it’s not always easy to find places where you can use the digital currency. That is about to change when it comes to Microsoft content,” wrote Chansanchai. “Starting Thursday in the US, by using BitPay, the world’s leading bitcoin payment processor, you can trade-in bitcoin – at current market value – and add it to your Microsoft account.”

“For us, this is about giving people options and helping them do more on their devices and in the cloud,” Eric Lockard, corporate VP of Universal Store at Microsoft said in a statement. “The use of digital currencies such as bitcoin, while not yet mainstream, is growing beyond the early enthusiasts. We expect this growth to continue and allowing people to use bitcoin to purchase our products and services now allows us to be at the front edge of that trend.”

Stalling Currency

It is fair to say that the virtual currency has had its ups and downs, as the value of the currency has fallen dramatically in the past year. Last year a Norwegian citizen made the headlines thanks to a small investment in Bitcoin, which allowed him years later to purchase a flat in Oslo.

But since then the value has dropped, and matters have not been helped by the collapse of the Mt Gox exchange earlier this year, along with increasing pressure from regulatory authorities around the world.

In September, the Bank of England warned that Bitcoins could pose a threat to financial stability in the UK should it see widespread adoption.

And new research from Reuters has suggested that Bitcoin adoption has stalled. Its figures revealed that while “wallets” – cyberspeak for accounts – are being created at a steady clip, many of them are empty.

Analysts also reportedly provided Reuters with data that shows liquidity in the cryptocurrency remains limited.

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