A few Bitcoin ATMs have recently been spotted in a place not many expected: Russia. Bitcoinist spoke with the machines’ payment provider company to get the latest scoop on how the BTM business is taking root in the city of St. Petersburg.
Fertile Ground?
The first Bitcoin ATM is a one-way BTM from UK-based company Bitlish. It was quietly launched in late February and subtly placed next to a few Bank ATMs at a local business center on St. Petersburg’s Vasilevsky Island.
Besides Bitcoin, the BTM also sells ZCash, Ethereum, and Litecoin.
First ever #Bitcoin ATM spotted in St. Petersburg #Russia @CoinATMRadar @bitcoinist pic.twitter.com/fMHqpD8x69
— ₿ (@cointillionaire) February 27, 2017
Shortly thereafter, a second similar machine was spotted at another business center not too far away on the same island.
A few years ago, Russia was seen as one of the most hostile nations for Bitcoin due to some legislators and the Ministry of Finance, in particular, calling for a ban and criminal penalties for mining and even spreading information on cryptocurrencies.
However, the climate has been thawing ever since. Russia is now starting to look like fertile ground for all-things Bitcoin following a favorable stance by the country’s central bank on blockchain technology, reoccurring Bitcoin conferences in the nation’s capital, and the emergence of blockchain startups such as the Moscow-based Waves platform.
Additionally, LocalBitcoins trading has been climbing non-stop as Bitcoin network nodes are becoming more prevalent in Moscow and beyond.
Bitcoin ATM Business Takes Root in Russia
Regardless, Bitcoin businesses are still reluctant to operate in Russia given its lack of regulatory clarity on cryptocurrencies. On the other hand, this means virtually no competition for those brave enough to set up shop first. This is why the country’s first BTM is indeed a milestone, whose success may determine whether other businesses follow suit.
Max Grain of Bitlish told Bitcoinist:
The decision to run the first Russian BTM in Saint-Petersburg was not of our own, we do not operate in Russia directly…We are a software company and crypto payments service provider, so it was our partner who decided to run the terminal integrated with our gateway.
Bitlish revealed that it’s not primarily focused on the Russian market and has partners in the U.S. and Latin America as well. However, it does have plans to expand its network in Europe with up to 5,000 BTMs and up to 300 machines in the CIS countries, which includes Russia.
Cheaper Than LocalBitcoins But…
Interestingly, there is no contact and no support information in the BTM’s touchscreen menu nor on the machine itself. Thus, it’s not exactly clear to first-time buyers who to contact if any problems arise.
It is strictly a one-way machine with a QR-code reader that let’s you insert cash notes to top-up your mobile Bitcoin wallet. The company’s website address is printed on the paper receipt so one should just visit the support link on the website in case of any issues, according to a representative.
The BTM charges a 3% fee with a single transaction limit of up to 15,000 rubles (~$260), which is considerably less than the ~10% premium on LocalBitcoins. However, there is no cap per day on the number of transactions and “you can buy as much cryptocurrency as you want,” according to Grain.
He adds:
We did not contact Russian authorities since it is our partner’s responsibility, but we always recommend to follow any possible local regulations or guidelines…Thats is why the Russian BTM allows you to top-up no more than 15,000 RUR per transaction. This is the limit for one unidentified money transfer transaction.
When asked if the company has been contacted by local authorities, he replied that they have not been informed by their partner of any problems thus far.
Leap of Faith?
Admittedly, the responses from the Bitlish representative were not very reassuring for me. Given the absence of on-site customer support info, the opaque local partner company, and the lack of customer reviews for both Bitlish and their machines, one must take a leap of faith before inserting cash rubles into a potential black hole.
Moreover, how can a first-time buyer explain to local police that some dubious machine — with only the word “Bitcoin” on it — did not send them virtual bits in return?
I’m sure you can see the problem here.
On the other hand, such an approach may be a prudent hedge against the current uncertainty for any Bitcoin businesses in Russia.
Back in 2013, for example, one bar was forced to stop offering bitcoin as a payment option or face being shut down. Unsurprisingly, the business quickly complied. So Bitlish, along with its unnamed partner company, may simply be dipping their toes into this untapped market to see how local authorities will react, which, if positive, could open the floodgates to more BTMs.
Nonetheless, while it’s certainly an encouraging sign to see Bitcoin vending machines popping up, paying a premium for verified LocalBitcoins traders is probably still the best option for Russians to get their hands on some bits.
But if you’re a brave soul, you can try the machines in person at these three locations in St. Petersburg, Russia. Let us know how it goes!
Would you try buying bitcoin from these machines in person? Let us know in the comments below!
Images courtesy of CoinATMRadar.com, Shutterstock, Twitter