In mid-November 2018, the most well-known cryptocurrency, Bitcoin, hit another new milestone. This time, a new report by Live Bitcoin News confirmed that Bitcoin has almost 4,000 ATMs to its name. A Bitcoin ATM is an ATM that allows people to exchange Bitcoin for cash. While many retailers and service providers have embraced Bitcoin – ranging from pizzerias to online marketplaces that sell home decor – not everyone has yet to hop onto the Bitcoin bandwagon. As such, it’s seen as a massive step forward that Bitcoin users now have a way to turn their cryptocurrency into the local currency which they can use to pay for tangible goods or services.
Admittedly, at the current figure of 3,993, there is still a long way to go. This is especially the case when you look at how these Bitcoin ATMs are (or rather, aren’t) spread out across the world. Of the 75 countries with these ATMs, 2,370 of them are in the United States, followed by Canada which has 679. Even MEDCs (more economically developed countries) such as Italy, the Netherlands, and Portugal have less than 100 of these ATMs between them, according to Coin ATMs Radar’s tally.
But, even so, Bitcoins users are positive. Not just because it provides them with an easy way to turn their cryptocurrencies into cold, hard cash while they’re on the go but because it addresses a longstanding issue within the crypto community: it could finally push banks to embrace cryptocurrency.
How Are Banks Embracing Cryptocurrency?
We’re a long way off until the terminals offered by big banks include a Bitcoin option too. Many of the Bitcoin ATMs that we’re seeing are operated independently and there’s something to be said there about the decentralized nature of these machines. However, big banks may eventually get to that point and we have already seen significant movements when it comes to cryptocurrency adoption at mainstream financial institutes.
For example, on November 16, it was reported that massive online retailer Amazon and the Bank of America (BofA) had both been awarded cryptocurrency-related patents. One of the Amazon patents, according to filings, add an additional layer of security in order to protect digital signatures and encrypted communication. The other, meanwhile, regards data storage and how it will be grouped together and distributed. Both of these patents related heavily to cryptocurrency, including KYC (Know Your Customer) proof and verification and the maintenance of a blockchain. The patent held by the Bank of America, on the other hand, was submitted all the way back in 2014 and discusses the way in which enterprise accounts will store the cryptocurrencies of their clients.
Other banks to have made moves regarding cryptocurrencies include Morgan Stanley and Markei Baumann. A report by Bloomberg on the Morgan Stanley announcement explains that the firm plans to offer Bitcoin swap trading for its clients. This will reportedly go live once the firm is able to prove demand from its clients which means that it could be made available very soon. Meanwhile, Bitcoin Magazine’s report on Maerki Baumann states that the private Swiss bank, headquartered in Zurich, Switzerland, is prepared to go one further, by offering to manage its clients’ cryptocurrency assets for them.
All around the world, financial institutes are thinking about how to provide cryptocurrency related services.
Why Banks Need to Adopt Cryptocurrencies
While the steady adoption of cryptocurrencies will be great news to enthusiasts of Bitcoin and the other crypto offerings, some may be concerned that banks are mostly doing this out of fear. There is the very real concern within the financial community that cryptocurrencies could become even more of a significant rival to fiat money.
They are right to be wary, especially considering that some of the most valuable industries have already begun to embrace cryptos in a big way. Cryptocurrency is being used in the fashion and beauty worlds in order to track the popularity of clothing and even connect people with dermatologists. Meanwhile, Betway suggests casinos may embrace cryptocurrencies if the price of Bitcoin is to increase substantially. Bitcoin’s value (which sits at under $5,000 as of the time of writing) is currently too small for small-stakes gamblers to play casino games with, but, benefits such as instant transactions make it especially useful for the casino market where players want to enjoy games (and their winnings) instantly.
In fact, the speed of transactions was recently the subject of a new Ripple ad, which noted that its users can send the cryptocurrency via text. As Ripple itself noted, trading fiat currency overseas digitally can be so slow that it can be faster to catch a flight and put the money into someone’s hands. Likewise, the stable values of different cryptocurrencies are putting pressure on banks, according to the managing director of the IMF, Christine Lagarde, giving banks another reason to take notice.
If banks are to heed the words by Lagarde and other economists, it will take a lot more than a few thousand more Bitcoin ATMs being installed until they have fully embraced cryptocurrency. FN London notes that banks employ more chefs than cryptocurrency experts, in a startling highlight of just how unprepared banks are for this digital revolution. Progress is being made, though, which means there is every reason to watch this space.
