The number of bitcoin ATMs has been on the rise in Russia’s capital and the rest of the country, a press report revealed this week. The service is in high demand because it provides easy access to cryptocurrency, but not at the highest exchange rates. It also faces regulatory uncertainties.
Russian Federation has more crypto ATMs than any regulations
The Russian daily Kommersant reported that there is a growing demand for cryptocurrencies and the increase in the number of machines offering digital asset teller services. There are currently several dozen Bitcoin ATMs (BATMs), which operate across the country, in spite of the absence of clear regulation.
Moscow leads the way in terms of new installations. Quoting one of the companies behind them, Rusbit, the newspaper revealed that 14 new ‘cryptomats’ have appeared in the capital city this year, bringing the total across the Russian Federation to 52 units. Given Russia’s territory and population, that’s still a relatively small number but Rusbit expects a spike in 2023.
BATMs permit users to buy one or more coins either with cash or non-cash payments like credit cards. Once the purchase is complete, they will send digital money to their crypto wallet. Some machines allow you to sell cryptocurrency in fiat. But, these cash withdrawals are not available at the moment for Russia.
Rusbit provides ATMs between $1,800-3,600. It also keeps them at 1% of its turnover. The company says its business is completely legal regarding the law “On Digital Financial Assets” (DFAs) which went into force in January, last year. These devices can share information with the Federal Tax Service in the same way as cash registers. They also verify customers’ identities and keep records of crypto addresses.
However, legal experts interviewed by the publication say that the bitcoin teller machines are still “in the gray zone” as far as regulations are concerned. The DFA law only partially regulated cryptocurrencies and related activities while the Russian parliament is yet to review and adopt a more comprehensive bill “On Digital Currency.”
Ksenia Petrovets is a senior associate with Birch Legal. She says that the law currently does not allow for digital currencies to be exchanged for fiat money, or any other cryptocurrency. These are both neither prohibited nor legally regulated.
Alexander Sharapov, a lawyer from KSK Group, pointed out that it’s unclear what legal acts should regulate the interaction between the seller and the buyer of the cryptocurrency in the case of BATMs. Pavel Ganin (partner at A.T.legal) added that there’s no protection for consumers.
Sergey Mendeleev (CEO of defibank platform Indefibank) is concerned that authorities may confiscate the bitcoin ATMs, just as they did with Bbfpro’s machines. Acting on request from the Central Bank of Russia, law enforcement seized 22 of the company’s machines in 2018.
Nevertheless, demand for this type of service is there, as for ordinary Russians it’s quite difficult to buy coins when they need to find peer-to-peer exchanges, open accounts on English-language platforms, and pass know-your-customer (KYC) procedures, remarked Roman Kaufman, co-founder of Berezka DAO.
However, the disadvantage is the poor exchange rates offered by BATM operators in Russia. These exchange rates are typically between 10 and 15% lower than online ones. However, those wanting to try out crypto can purchase less digital currency through teller machines than they could on trading platforms.
Do you think sanctions that are limiting Russians’ access to major crypto platforms could result in an increase in bitcoin ATM installations in their country? Leave a comment below.
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