One-Way Cryptocurrency ATM in Los Angeles, California. This model from CoinhubATM produced by General Bytes is a "one-way" bitcoin ATM, meaning users may only buy Bitcoin and other cryptocurrencies with cash.
One-Way Cryptocurrency ATM in Los Angeles, California. This model from CoinhubATM produced by General Bytes is a "one-way" bitcoin ATM, meaning users may only buy Bitcoin and other cryptocurrencies with cash.

Bitcoin ATMs (Automated Teller Machine) are kiosks that allows a person to purchase Bitcoin and other cryptocurrencies by using cash or debit card. Some Bitcoin ATMs offer bi-directional functionality enabling both the purchase of Bitcoin as well as the sale of Bitcoin for cash. In some cases, Bitcoin ATM providers require users to have an existing account to transact on the machine.

There are two main types of Bitcoin machines: unidirectional (one-way) and bidirectional (two-way). Only about 30% of all crypto ATMs worldwide are bidirectional,[1] and less than 23% in the U.S.[2] Both types are connected to the Internet, allowing for cash purchase and/or sale of Bitcoin. Some machines use a paper receipt and others move money to a public key on the blockchain. Bitcoin cash kiosks look like traditional ATMs, but do not connect to a bank account and instead connect the user directly to a Bitcoin wallet or exchange. While some Bitcoin ATMs are traditional ATMs with revamped software, they do not always require a bank account or debit card. On average, transaction fees are 10-20% but can go as high as 25% and as low as 6.5%.[citation needed]

History

On October 29, 2013, a Robocoin machine opened in the Waves coffee shop in downtown Vancouver, Canada.[3][4] This machine is understood to be the world's first publicly available Bitcoin ATM. Robocoin ceased operations in 2015.[5] On December 8, 2013, Europe's first Bitcoin ATM was installed in Bratislava, Slovakia.[6] The first machine in the United States went online on February 18, 2014, in a cigar bar in Albuquerque, New Mexico,[7] though it was removed 30 days later.[8] Months later, in May 2014, the first licensed bitcoin ATM in the U.S. was developed by Coinme[9] and installed at the Spitfire Grill in Seattle WA.[10]

Canada

In 2014, Canada was the first country to approve regulation of cryptocurrencies,[11] although it took some time to enforce.[12][13] In February 2014, the Finance Minister mentioned plans to introduce anti-money laundering and anti-terrorist financing regulations for virtual currencies such as Bitcoin.[14] In June of that year, the Governor General approved an amendment to Bill C-31 that would treat cryptocurrency businesses as Money Services Businesses (MSBs),[15] and the Department of Finance circulated a draft of the proposed regulations in June 2018.[16] As of July 2020, businesses dealing in virtual currencies are considered MSBs by the Financial Transactions and Reports Analysis Centre of Canada.[17]

In 2018, the Canada Revenue Agency (CRA) commissioned an investigation on Bitcoin ATMs to find out if tax laws were being followed by users.[18] From December 2017 to February 2018, the number of Bitcoin ATMs in Canada increased by 20%.[19] In June 2019, Vancouver was considering a ban on the machines due to money-laundering concerns.[20]

As of February 2022, Localcoin, a Canadian Bitcoin ATM provider currently has the largest footprint of Bitcoin ATMs in Canada, according to Coin ATM Radar.[21]

Bitcoin Well based in Edmonton became the first publicly traded Bitcoin ATM company on July 30, 2021.[22]

United States

According to Coin ATM Radar, there were more than 24,700 Bitcoin ATMs in the US as of September 2021, up from 2,342 in Jan 2018. some small shop owners earning a reported $300 a month for rental space.[23] By May 2021, the number of crypto ATMs had grown vastly to over 38,000.[24] Transactions fees for ATM use vary depending on the company operating the machine. Some ATM operators charge fees as high as 25% while others charge as low as 6.99%. Some bitcoin ATMs operating in the US are imported from other countries; for example, Czech company General Bytes sold thousands of their machines to operators operating in US.[25] Through Coinme, bitcoin can be exchanged in the United States for local currency at ATMs located in select MoneyGram locations and Coinstar machines.[26]

Cryptocurrency ATM in Peoria, Illinois. This model is a "two-way", meaning users may buy or sell Bitcoin and other cryptocurrencies.
Cryptocurrency ATM in Peoria, Illinois. This model is a "two-way", meaning users may buy or sell Bitcoin and other cryptocurrencies.

Europe

As per Coin ATM Radar, there are 1,026 Bitcoin ATMs across the European Union member area. The nations of the Union with the highest number of Bitcoin ATMs are Spain (174), Austria (133), Poland (114), Romania (87), Czechia (69), Greece (63) and Italy (60).

South Africa

A Bitcoin ATM in Sandton City, South Africa
A Bitcoin ATM in Sandton City, South Africa

There are a total of 14 Bitcoin ATMs in South Africa according to Coin ATM Radar, the most in Africa. ATMs fiat the Rand (ZAR) and transactions over 10,000ZAR ($667) require ID verification. These ATMs are mostly found in Cape Town, Durban, Johannesburg and Pretoria.

Compliance

Bitcoin ATM operators need to adjust the limits on deposits and withdrawals according to AML/KYC standards applicable in the jurisdiction where their ATMs are placed.[citation needed] In some countries / states this requires a money transmitter license.

In the United States, the Bank Secrecy Act (BSA) requires Bitcoin ATM operators to establish and maintain an effective written AML program reasonably designed to prevent ATM machines from being used to facilitate money laundering and the financing of terrorist activities.[27] Bitcoin ATM operators must be registered as Money Service Businesses and are regulated by the Financial Crimes Enforcement Network.[28]

In March 2022, the Financial Conduct Authority (FCA) in the United Kingdom declared that all cryptocurrency ATMs in the country were illegal and would need to be shut down. None of the ATM's operators had successfully registered with the agency. The FCA cited a failure to comply with know your customer laws (KYC), which track and prevent money laundering, as well as the high risk to customers, due to a lack of regulation and protection. At the time, Coin ATM Radar listed 81 such ATMs in the country.[29][30]

See also

References

  1. ^ "Crypto ATM Support for Buy and Sell". coinatmradar.com. Retrieved 2020-08-10.
  2. ^ "Crypto ATM Support for Buy and Sell in United States". coinatmradar.com. Retrieved 2020-08-10.
  3. ^ Wagner, Kurt (31 October 2013). "World's First Bitcoin ATM Opens In Vancouver, Canada". Mashable. Retrieved 9 February 2014.
  4. ^ McMillan, Robert (2013-10-28). "World's First Bitcoin ATM Arrives at Coffee Shop, Goes Live Tomorrow". Wired. ISSN 1059-1028. Retrieved 2020-08-11.
  5. ^ "Robocoin Kiosk cryptocurrency ATM machine producer". coinatmradar.com. Retrieved 2020-08-11.
  6. ^ "The First In Europe – Hunting Down Europe's First Bitcoin ATM In Bratislava, Slovakia". 52insk.com. 2017-06-16. Retrieved 2018-08-31.
  7. ^ Brodkin, Jon (18 February 2014). "Bitcoin ATM goes live in Albuquerque, more coming to Austin and Seattle". Ars Technica. Ars Technica. Retrieved 19 February 2014.
  8. ^ "Bitcoin ATM yanked after brief debut". CNET.
  9. ^ Parkhurst, Emily (May 1, 2014). "America's first licensed bitcoin ATM opens in Seattle; privacy concerns could keep people away". www.bizjournals.com. Archived from the original on 2014-05-04. Retrieved 2021-10-24.
  10. ^ "Meet your Bitcoin ATM: Digital currency craze hits Seattle, with help from startup vets". GeekWire. 2014-05-01. Retrieved 2021-10-24.
  11. ^ "Blockchain Laws and Regulations | Canada | GLI". GLI - Global Legal InsightsInternational legal business solutions. Retrieved 2020-08-11.
  12. ^ Canada, Financial Transactions and Reports Analysis Centre of (2014-12-01). "FINTRAC Policy Interpretations - Money services businesses". www.fintrac-canafe.gc.ca. Retrieved 2020-08-11.
  13. ^ "FINTRAC Advisory regarding Money Services Businesses dealing in virtual currency". Fintrac-canafe.gc.ca. Retrieved 2016-11-22.
  14. ^ "Bitcoin Survey". Loc.gov. Retrieved 2016-11-22.
  15. ^ Ahmad, Tariq (June 2018). "Regulation of Cryptocurrency". www.loc.gov. Retrieved 2020-08-11.
  16. ^ "Canada Gazette, Part I, Volume 152, Number 23: Regulations Amending Certain Regulations Made Under the Proceeds of Crime (Money Laundering) and Terrorist Financing Act, 2018". gazette.gc.ca. 9 June 2018.
  17. ^ "The difference between money services businesses and foreign money services businesses".
  18. ^ "CRA surveyed businesses to find out why they're taking bitcoin ATMs | CBC News".
  19. ^ "Bitcoin Automated Teller Machines (ATMs) in Canadian Businesses". 12 October 2018.
  20. ^ Denis, Jen St (2019-06-04). "Vancouver considering a ban on Bitcoin ATMs — which police say are 'ideal' for money laundering". The Toronto Star. Retrieved 2020-08-11.
  21. ^ "Top Crypto ATM Operators (Canada)". CoinATMRadar. Retrieved Feb 15, 2022.
  22. ^ St, Western; ard (2021-08-20). "Alberta's Bitcoin Well now listed on TSX". The Western Standard. Retrieved 2021-10-18.
  23. ^ "How many bitcoin ATMs or BTMs are there in the US?". How Many Bitcoin ATMs?. Retrieved 2021-08-30.
  24. ^ "How many bitcoin ATMs or BTMs are there in the US?". How Many Bitcoin ATMs?. Retrieved 2021-08-02.
  25. ^ "Bitcoinmat nemá jen Alza: seznam automatů na bitcoiny" [Bitcoinmat doesn't just have Alza: a list of bitcoin machines]. E15.cz (in Czech). Retrieved 2018-02-27.
  26. ^ Nunez, Adriana. "MoneyGram is re-entering the crypto scene with a Coinme partnership". Business Insider. Retrieved 2021-10-24.
  27. ^ "Operating Bitcoin ATM Business in the US: MTL & AML/BSA Guide". 18 February 2021.
  28. ^ https://www.fincen.gov/sites/default/files/2019-05/FinCEN%20Guidance%20CVC%20FINAL%20508.pdf[bare URL PDF]
  29. ^ Moon, M. (11 March 2022). "UK's financial regulator orders shutdown of all Bitcoin ATMs". Engadget. Retrieved 11 March 2022.
  30. ^ Titcomb, James (11 March 2022). "Bitcoin cashpoints forced to shut down after being declared illegal". The Telegraph. Retrieved 11 March 2022.

Media related to Bitcoin ATMs at Wikimedia Commons