July 30, 2019 | AtoZ Markets – The leading crypto ATMs providers assure that users need them in countries where there is no high-quality Internet connection. Crypto ATMs look like regular cash ATMs and operate on the same principle of “deposit-withdrawal”. But what is the main difference between cash ATMs and crypto ATMs?
Origin of the digital banking systems
Digital banking is the branch of online banking where banking services delivered over the internet. Online banking focuses on digitizing the “core” aspects of banking.
Digital banking in its turn encompasses digitizing every program and activity undertaken by financial institutions and their customers.
The early version of online banking began in 1981 in New York City.
In October 1994, Stanford Federal Credit Union started to offer internet banking to all of its customers.
In 2001, Bank of America became the first financial institution to gain more than 3 million online banking customers.
The evolution of online banking continued and it slowly gained popularity in e-commerce. Big banks started to offer online products and services, e-banking seemed to gain legitimacy for consumers.
By 2006, online banking had become mainstream over 80 percent of banks in the U.S. were offering internet banking services.
By 2018 online banking has become widespread. Moreover, many banks started operating only on the internet, effectively decreasing overhead costs to offer more competitive rates on savings accounts and enjoy higher profit margins. So, digital banking is popular and in demand.
A survey conducted by Visa among 36,000 Europeans showed that mobile payments and online banking are used by 91% of the population of Turkey, 89% of the population of Denmark, 87% of the population of Norway, 86% of the population of Sweden and 87% of the population of Israel.
A brief history of the cash ATMs
It is difficult to imagine modern life without an ATM since the volume of non-cash payments and the popularity of credit cards are steadily increasing.
The first prototype of a cash dispenser patented in 1939 by Luther George Simcan. It regularly issued cash, but when issuing money not debited from the account.
The next person who played an important role in building an ATM was Don Wetzel. He had the idea to develop a terminal that would take over 90% of the duties of employees working in bank branches.
The first contract for the installation of an ATM signed with Chamical Bank. And in 1973, a group of specialists under the leadership of Wetzel obtained a patent for an ATM – a device that issues cash at the request of a bank customer using a bank card.
The number of crypto ATMs increases exponentially
The development of cryptocurrency trading led to the active development of the crypto banking sector and contributed to the enhanced progress of crypto ATMs regulations.
A crypto ATM allows a person to exchange cryptocurrency and cash. Some ATMs offer bi-directional functionality enabling both the purchase of coins as well as the sale of Bitcoin for cash. So, sometimes Bitcoin ATM providers require users to have an existing account to transact on the machine.
Moreover, according to the recent study of crypto market analysts from Datalight, the number of Bitcoin ATMs increased from 954 in January 2016 to 2,053 by January 2018.
Most such ATMs, as of January 2018, were located in the United States and Canada. The Bitcoin ATMs located in Europe made 20.42 percent of the global ATM market share.
Where crypto ATMs prohibited?
In most countries cryptocurrencies are legal. At the same time, from time to time the companies installing crypto terminals have problems with compliance with their country regulations or with the attention of the authorities.
Bitcoin ATMs operate in 76 countries of the world. Thus, in each more or less developed country, there are at least a few such terminals. However, in such countries as China, India, Iceland, Ecuador, Russia and others, Bitcoins together with Bitcoin ATMs are prohibited.
Since Sept. 4, 2017, the Chinese government made it illegal for mainlanders to exchange cryptocurrencies.
In addition, since July 2018, by circular released by the Reserve Bank of India (RBI) in April, banks were prohibited from dealing with Bitcoin and cryptocurrency exchanges.
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