The number of Bitcoin ATMs across the globe has increased by 70% over the last six months according to a report by Trading Platforms. America and Canada lead the market in terms of the most ATMs in operation, with the US accounting for 84% of all Bitcoin ATMs globally.
One of the explanations for this boom lies in the increasing adoption of cryptocurrencies by mainstream investors. With investorial support of Bitcoin having significantly increased over the last year, the interest in cryptocurrency ATMs has also increased.
A Bitcoin ATM is essentially the same in format as any other automated teller machine, and allows a person to purchase cryptocurrency by cash or debit card. At the present moment, Bitcoin is the most popular currency supplied by crypto ATMs, however there are an increasing number of ATMs that supply altcoins.
The regulation of Bitcoin ATMs in America varies from state to state. At present, 35 states in America do not require a money transmitter license (MTL), but most ATM machines will need to comply with AML and KYC policies to prevent these machines from being used to launder money or finance illegal operations.
California, Georgia, and Florida, for example, permit the buying and selling of cryptocurrency through ATMs, whereas Arizona, Maryland and North Carolina only allow the buying of cryptocurrency through an ATM.
While America has seen a surge in Bitcoin ATMs, the UK is one of the only countries to have experienced a downward trend. In fact, the number of crypto ATMs in the UK saw a 25% reduction over the last six months leading up to March 2021. This decrease is partly the result of strict lockdown measures in the UK over the past year, which saw a third lockdown mandated in January of this year, and which is only just in the process of opening up.
One of the downsides of using a crypto ATM machine, compared to online exchanges, is the transaction fees involved, with the worldwide average currently at 8.4% for buying bitcoins from machines, and 5.4% for selling bitcoins for cash. This can run as high as 16% however, and makes the use of a physical machine much less attractive for large transactions.
Nonetheless, Bitcoin ATMs will likely maintain a role in many countries where they offer a unique service. Fundamentally, these machines provide an important service for users in countries with volatile financial markets, where they provide citizens with a quick way to exchange their local currency for cryptocurrency.