THE Monetary Authority of Singapore (MAS) has warned consumers to be cautious about buying and using bitcoins as they are not regulated here.

The warning comes even as the bitcoin vending machine suppliers already have plans to roll out many more islandwide.

The MAS told The Straits Times in a reply that it does not regulate bitcoin, including its purchase, sale or use, whether online or via other means such as vending machines.

"Virtual currencies, including bitcoin, are not legal tender and are not recognised by the MAS as an official medium of exchange or as a form of securities," it added.

The MAS also warned that consumers and merchants who use virtual currencies such as bitcoins should be aware of their risks. For example, the value of bitcoins can fluctuate greatly within a short period of time and so consumers and businesses might suffer monetary losses as a result of this volatility.

They may also be unable to obtain a refund of their money should such a scheme cease to operate and may have no legal recourse as bitcoins are not issued by any identifiable organisation.

With Singapore having six such machines so far, the number could soon double.

As the machines accept only cash for bitcoins and not the other way around, the MAS refers to them as vending machines rather than ATMs.

The three bitcoin vending machine suppliers, Numoni, Bitcoin Exchange and Tembusu Terminals, say that while the number of actual transactions has not been very high, a lot of merchants have requested that they place a bitcoin machine in their shops.

These include pubs, sellers of computer and mobile phone accessories and computer game shops, said Numoni chief executive Norma Sit. Numoni launched four bitcoin vending machines in Singapore last week - at Sim Lim Square, Singapore Management University, Lucky Plaza and Funan DigitaLife Mall.

"We have 70 machines in Singapore that sell prepaid airtime for mobile phones and we are now considering converting 15 to 20 of these to also sell bitcoins.

"Some of the merchants that host our prepaid airtime machines are asking us to convert these into bitcoin machines because they know this is the way of the future and they want to get in on it early so they can start learning."

Bitcoin Exchange said response to its machine at Citylink Mall exceeded its expectations, with a queue forming when the machine went live on Friday.

"We originally planned to have four machines in Singapore by the end of the year, but we may revise this number upwards," said director Zann Kwan.

Tembusu Terminals, which has a machine at the Spiffy Dapper pub at Boat Quay, has plans to launch several more machines over the coming weeks.

The bitcoin vending machine suppliers told The Straits Times they have been updating MAS about their activities and that they would make sure to follow guidelines set out by MAS.

They are treading cautiously and coming up with ways to make bitcoin transactions safer.

Numoni, for example, will not enable their machines to accept bitcoins in exchange for cash as this is riskier than selling bitcoins.

Tembusu Terminals said it is working on a "know-your-customer" feature for its machines.