The growth of new bitcoin ATMs that let people buy and sell cryptocurrencies slowed in the first two months of the year, with just 1,817 installed, compared with 2,435 in the same period last year.
That’s despite news like bitcoin ATM operator LibertyX’s acquisition by NCR in August, Walmart rolling out a 200-machine test run in October, and MoneyGram buying a stake in Coinme last month. But the bitcoin ATM industry seems to be doing just fine as the 36,082 machines currently available around the world is double the number available at this time last year and nearly six times as many as in 2020.
It’s worth noting, however, that 1,817 new machines are more than the grand total available in the European Union, which has 1,396. And while Canada has 2,267, no other continent has as many as 250, with Asia at 238 and Africa, Australia/New Zealand, and South America each below 100.
What becomes clear is that bitcoin ATMs — and most offer more than one type of cryptocurrency — are becoming an almost entirely American game.
The reason isn’t hard to figure out. The number of new machines “practically flat-lined” in Europe at the start of 2019, according to Coin ATM Radar. That’s when the EU’s tough fifth Anti-Money Laundering Directive (5AMLD) substantially increased AML and crypto regulation.
Singapore got hit last month when Daenerys & Co. — the country’s largest operator — pulled its five machines after the Monetary Authority of Singapore banned “any form of advertisements or promotional materials in public areas,” according to Bloomberg.
It also targeted crypto ATMs specifically, saying they could encourage people to buy crypto “on impulse.”
US Regulations Coming
The climate is a lot more bitcoin ATM-friendly in the U.S. Walmart’s test run could lead it to install 8,000 kiosks in stores around the country.
In January, MoneyGram showed a bullish outlook on bitcoin ATMs when it took a 4% stake in bitcoin ATM operator Coinme, which it called “one of the first and fastest growing cryptocurrency companies in the world” in a press release.
Read more: MoneyGram Buys Minority Stake in Coinme
Even so, it’s clear bitcoin ATMs are in for some attention as the White House and Congress look toward creating a firm and clear regulatory framework for cryptocurrencies, particularly around AML rules.
In December, the General Accounting Office (GAO) issued a report on focusing on crypto ATMs’ role in the use of digital currencies in facilitating human and drug trafficking. Noting that the FBI has said it expects “to see an increase in the use of virtual currency kiosks for illicit purposes,” the GAO made two recommendations.
The first was for the IRS and the Treasury Department’s Financial Crimes Enforcement Network (FinCEN) to review and possibly strengthen the money services business registration requirements for crypto ATMs.
The second was to mandate that operators keep law enforcement up to date on the location of all such kiosks, noting in its report that those agencies “reported that kiosk location data, particularly when linked to operators of those locations, can improve the information that law enforcement has available to identify the source of illicit transactions, such as human and drug trafficking.”
It’s a problem the crypto ATM industry is starting to face head on in the U.S, with the formation of the Cryptocurrency Compliance Cooperative “advocating for universal compliance standards in the cash-to-cryptocurrency industry.”
Of course, there’s one other factor that may have an impact on the long-term market for crypto ATMs: With payments app providers like PayPal and Block’s CashApp making it easier to buy crypto without going through an exchange, these freestanding kiosks have more competition.