California is looking to bring regulation to crypto ATMs by proposing a new bill limiting daily withdrawals to $1,000. Not only that, the proposal also wants to revise operator fees, which are currently as high as 33%.
Crypto ATM regulation: California proposes maximum withdrawal limits at $1,000 per day
California lawmakers are scrambling to try to give regulation to crypto ATMs, the cryptocurrency ATMs through which users can buy crypto while also paying cash.
And in fact, California has proposed a new bill Digital financial asset transaction kiosks that limits maximum withdrawals from crypto ATMs to $1,000 per day.
This choice stems from the fact that crypto ATMs with withdrawal limits of up to $50,000 per day also exist in the country, as well as the number of scams seems to be on the rise.
Not only that, the new California bill also revises the fees charged by crypto ATM operators, limiting them to $5 or 15%, whichever is higher.
Again, it appears there are crypto ATMs in the region that charge fees of up to 33 percent, such as the cryptocurrency ATM in Sacramento. According to a legislative analysis, actually, on average, the fees charged by operators are between 12% and 25%.
The law, if passed, will go into effect on 1 January 2024. While, as far as the adjustment of fees is concerned, we are talking about 2025.
Crypto ATM regulation and the real goal of the proposed California law
What there is to understand from the present regulation of crypto ATMs by the State of California is the real goal.
And in fact, in this regard, Democratic Senator Monique Limón, coauthor of the bill, is reported to have said that this bill would be a real intervention by the state to protect people who have experienced fraud through crypto ATMs.
Basically, the senator is referring to the growing scams taking place in California, where fraudsters are asking victims to go to crypto ATMs, forcing them to deposit cash for a crypto of their choice.
Obviously, by using cash, the transactions are no longer traceable and the scammer will be able to withdraw later, whenever he wants, without precisely being detected.
On the other hand, however, there are those who argue that such regulation of crypto ATMs in California would only hurt the operators who have to pay rent for their machines.
In fact, according to them, such a proposal does not address the core issue of fraud, but rather would ultimately punish the specific technology.
The growth of cryptocurrency ATMs globally
According to CoinATMRadar, it appears that in California alone, there are more than 3,200 Bitcoin ATMs. That’s a sizable figure when you think about the scam factor, but incredible when you look at it from a cryptocurrency ATM growth perspective.
And so, looking at the growth curve of crypto ATMs, it seems that since the beginning of this year 2023, the number of installations globally has been declining compared to previous years, but in recent months it is on the upswing compared to those at the beginning of the year.
The peak in the number of Bitcoin and crypto ATM installations occurred in December 2022, with 39,318 installations globally.
In the first three months of 2023, the decline began, with March 2023 starting with 37,716 installations globally, and then a drop of 1057 machines.
The worst month, then, was July 2023, which ended with a decline of 4,123 installations.
From August 2023 to the present, however, it appears that the installation curve is recovering, with October starting with 32,730 total crypto ATM installations.