Australia leads world market in crypto ATM growth as kiosks pour in

Bitcoin automatic-teller machines are streaming into Australia, making the country the fastest-growing market for the kiosks and stirring questions about the source of demand for the contentious service.

Users of such ATMs can feed in cash to receive crypto in digital wallets or obtain physical notes from token sales. The US accounts for the vast bulk of the market with about 32,000 machines, followed by the roughly 3,000 in Canada, according to data collated by Coin ATM Radar.

Australia is in third spot with nearly 1,200, up from just 73 two years ago, and more are on the way. In an August call with analysts, US-based Bitcoin Depot Inc.’s Chief Executive Officer Brandon Mintz said the company has over 200 kiosks in Australia waiting to be deployed pending a regulatory green light.

 

Coin ATM Radar’s data indicate the recent growth in Australia leads the world. Operators argue the kiosks boost financial inclusion by offering easy access to crypto. Critics flag risks such as money laundering as well as scams that dupe users into losses. The ATMs are banned in the likes of the UK and Singapore, while Germany is in the midst of a crackdown.

US Export

North American providers seeking expansion spurred the growth of kiosks in Australia, where most operators have some compliance controls in place, said Angela Ang, senior policy adviser at blockchain intelligence firm TRM Labs. Still, Australian authorities have “identified crypto ATMs as a money laundering vulnerability,” she said.

In a statement last year, police outlined the laundering technique: illicit cash is put into an ATM in return for digital assets, which are then spun through many transactions until their origins are nearly impossible to trace.

Crypto kiosks dominate the cash-to-crypto industry, which has processed at least $160 million in illicit volumes globally since 2019, according to TRM. Australia as a whole saw about $223 million of illegal digital-asset activity from 2022 to 2023, consultancy Chainalysis Inc. estimates.

Teller machines make up a small slice of worldwide trading in the crypto market, whose value exceeds $2 trillion. In Australia, any provider of digital currency exchange must register with the Australian Transaction Reports and Analysis Centre, or Austrac.

Gambling Culture

In response to questions about the risks from crypto teller machines, a spokesperson for the Australian Taxation Office said that addressing technology-enabled crime is a priority focus area for the ATO-led Serious Financial Crime Taskforce.

Another piece of the puzzle is the entrenched gambling culture in the country of 27 million people, whose per capita losses on legal forms of gambling are the highest globally, according to estimates cited by the nation’s health and welfare institute. That love for betting spills over into wagering on volatile crypto coins, some of which have surged in the past year.

Meanwhile, local banks have curbed the ability to transact with digital-asset exchanges, making it harder for some to trade crypto. Commonwealth Bank of Australia, National Australia Bank Ltd., Australia & New Zealand Banking Group Ltd. and Westpac Banking Corp. have all imposed restrictions over concerns about scams.

The curbs have prompted more local crypto users to seek “alternate financial platforms,” including overseas ones, said Caroline Bowler, chief executive officer of digital-asset exchange BTC Markets Pty. New entrant CoinFlip is contributing to the increase in kiosks domestically, she added.

‘Parallel’ System

Chicago-based CoinFlip said the value of digital-asset transactions through its ATMs in Australia more than quadrupled in the past year. Given crypto is a “parallel financial system to the fiat system, it makes sense there would be a physical component,” for access to cash, Chief Executive Officer Ben Weiss said.

CoinFlip charges between 6 per cent and 14 per cent in commissions in Australia, less than the 6 per cent to 18 per cent in the US, Weiss said. Earlier this year, the firm launched a trading desk in Australia for customers who want to transact bigger amounts in crypto.

Bitcoin Depot’s Mintz on the call with analysts drew a comparison with the US state of Texas, whose population is about the size of Australia’s but which has roughly 3,000 to 4,000 Bitcoin ATMs. “The market has potential to grow by thousands of Bitcoin ATMs over the next couple of years in Australia,” he said. 

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