How and why bitcoin ATMs help underbanks
Did bitcoin ATMs help the unbanked and underbanked? And what role do regulations and cash use play?
A topic that sometimes comes up with cryptocurrency is whether it will see widespread use among sub-banks. Since it usually requires some form of digital payment to buy bitcoin, this can hold back the unbanked market. However, Bitcoin ATMs offer a key service for this group.
Since bitcoin ATMs are often cash only, they provide an easy tool for the unbanked and underbanked to use with cash payments. This actually plays out when you look at the data of countries that use a lot of cash and the number of bitcoin ATMs.
Tradingbrowser.com, a crypto trading guide and stock market reviews company, recently published a study that took a look at bitcoin ATMs and found that countries with high numbers of unbanked populations also had higher numbers of cryptocurrency adoption and bitcoin ATMs.
For example, 42% of Romania’s population is unbanked, but more than 300,000 residents own cryptocurrency and there are 156 bitcoin ATMs in the country. In addition, 9% of all payments in Romania are made in cash. In addition, Bulgaria, which has 74% cash payments, has 33 bitcoin ATMs.
However, the opposite was the case in countries with low cash payment rates, such as Sweden, where only 1% of all transactions are made in cash and the country has no bitcoin ATMs installed.
This trend is not followed by all countries, as Hong Kong has 147 bitcoin ATMs and only makes 4% of payments in cash.
“The rise of bitcoin ATMs and cash payments as key drivers of adoption is evidence of the need for accessible and user-friendly infrastructure that can facilitate seamless integration of cryptocurrency into everyday transactions,” a Tradingbrowser spokesperson said in an email. “It is worth noting that the high proportions of unbanked populations in certain countries are a major contributing factor to cryptocurrency adoption rates. This highlights the need for innovative and inclusive financial services that can cater to underserved populations and give them greater financial autonomy and flexibility.” .”
However, the data raises a number of questions, such as what other factors might be driving the use of bitcoin and bitcoin ATMs in countries with large numbers of unbanked citizens? What role do the regulations play? To learn more about this, ATM Marketplace reached out to Daniel Larsson, Senior Editor at Tradingbrowser.com in an email interview.
Q. The data shows unbanked countries that have a higher number of bitcoin ATMs. Why do you think this is the case?
ONE. We believe it is the lack of traditional banking infrastructure and the need for alternative financial solutions that has pushed for the installation of these Bitcoin ATMs in unbanked countries. For nations that rely largely on cash, Bitcoin ATMs appear to provide a more accessible and user-friendly way to trade cryptocurrencies.
Q. How does bitcoin benefit the underbanked?
ONE. Since blockchain is a decentralized network, bank-based individuals do not need to go through a centralized system like a bank to transfer value securely. Bitcoin transactions are also much faster and in many ways cheaper than traditional banking transactions, making it an easier way to conduct financial transactions.
Q.Does regulation play a role here? In other words, are underbanked countries softer on crypto regulations?
ONE. From our point of view, regulations can play a role in the adoption of cryptocurrency in unbanked countries since many of these nations have fewer regulations or more permissive regulations regarding blockchain and cryptocurrency. However, this depends on the nation, as we have also seen highly unbanked countries with stricter cryptocurrency regulations to avoid fraud and money laundering.
Q.Do you see bitcoin ATMs growing in underbanked countries? Why or why not?
ONE. Yes we do. If the trend continues and there are no barriers in place by governments, there should be no reason for these bitcoin ATMs to continue providing financial support in unbanked nations. As more people become aware of these ATMs, demand is likely to increase. Additionally, as the infrastructure for traditional banking in regions with highly unbanked populations does not change overnight, we can speculate that the growth of bitcoin ATMs will continue in the near future.
Bradley Cooper is the editor of ATM Marketplace and was formerly the editor of Digital Signage Today. His background is in information technology, advertising and writing.
