Bitcoin ATMs come to the United States
By John Stewart
What is said to be the first ATM for Bitcoins in the United States was announced on Tuesday by Lamassu Inc., which made the machine. The ATM is installed in a cigar bar and lounge near the University of New Mexico in Albuquerque, according to a news release from Lamassu.
The news follows the deployment last October of a similar machine by a rival manufacturer, Robocoin, in a coffee shop in Vancouver, British Columbia.
The machines allow users to exchange dollars for Bitcoins by feeding bills into a slot in the ATM. The digital currency is credited to a mobile wallet on the user’s phone. The Lamassu machine, which is online to Bitcoin exchanges, allows third-party deployers, such as independent sales organizations, to control exchange rates and fees.
Zach Harvey, chief executive of Lamassu, tells Digital Transactions News by email he expects the next U.S. installation will take place “in the coming days,” though he can’t disclose the location. He says his company, which maintains a factory in Portugal and has its incorporation in the British Virgin Islands, has shipped eight of its ATMs, known as the Bitcoin Machine, to the U.S. since the company began operations six months ago. Another dozen are on order, he says. The 110-pound tabletop machines list for $5,000 apiece, though the price drops to $4,000 for quantities of 10 or more.
Retail venues are interested in installing the machines to make it easier for customers to obtain Bitcoin, Harvey says. Dealing directly with Bitcoin exchanges can be an awkward and somewhat intimidating experience for first-time users, he says. “The operators of these machines want to provide painless access to obtaining Bitcoins, and that’s exactly what our machine was designed to do,” Harvey says. “There are other ways of buying Bitcoin, but none as fast and intuitive.”
For the installation in Albuquerque, Lamassu worked with Enchanted Bitcoin, a Bitcoin ATM deployer. The company has registered with the Financial Crimes Enforcement Network (FinCEN), a law-enforcement agency of the U.S. Treasury, as a money-services business (MSB), which subjects it to regulations guarding against money laundering.
“We require all of our U.S. buyers to fill out a due-diligence questionnaire, part of that questionnaire addresses the need for FinCEN and MSB registration,” says Harvey. “We make sure they know exactly what they're getting into.”
To get Bitcoins from Lamassu’s ATM, a user calls up his Bitcoin wallet app on his smart phone and scans the app’s quick-response (QR) code at the machine. He then inserts as much cash as he wants. The machine converts the cash to Bitcoins at the exchange rate set by the deployer and deposits the Bitcoins in the user’s mobile wallet. Total transaction time is 10 seconds to 15 seconds.
An administrative interface allows deployers to link the machine to any Bitcoin exchange and to set exchange rates and fees.
While Bitcoin has become more popular over the past year or so, ATM experts express doubt that the new machines will become more than niche appliances. The risk for deployers, they say, is that consumer demand will not develop fast enough to deliver profits. Meanwhile, legal problems associated with some Bitcoin exchanges and online merchants accepting the digital currency could scare off some potential venues, they say.
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