Walk-In Cryptocurrency Exchanges Emerge Amid Bitcoin Boom
In a small shopping park in Mississauga, Ontario, a new type of store can be found near a dentist, a Pizza Hut, and a Vietnamese restaurant. It looks like a small local bank, or maybe a bureau de change, with a well-lit waiting room, reception, and booths surrounded by bulletproof glass.
But Coin Nerds Inc. offers visitors something that other financial storefronts typically don’t: cryptocurrency.
The owners of the store, which opened in 2018, belong to a small group of entrepreneurs who believe there is a place for virtual currency offline and on Main Street.
âWe enable individuals from all walks of life to participate in this ecosystem of digital assets, without the barriers of attempting to integrate with self-service online exchanges, not to mention the technological barriers that people from a certain age might perceive, âsaid Adam Hack, CEO and Founder of Coin Nerds.
Physical crypto exchanges all work slightly differently, but their basic premise is that customers can go off the streets and buy various cryptocurrencies with cash, credit card, or wire transfer. Stores teach new customers how different digital currencies work and walk them through the process of setting up a digital wallet that the investor controls through an app. And when customers want to exchange their digital coins for local currency, the exchange counter can handle it for them.
The exchanges charge a fee ranging from 0.99% to 5% for each transaction, slightly more than those charged by the major online exchanges.
Their owners claim that physical exchanges enhance the experience of buying and selling cryptocurrency, which typically takes place through online exchanges such as those managed by Coinbase Global. Inc.
or Binance Holdings Ltd. Such platforms can be popular but can put off those unfamiliar with the crypto markets, Hack said.
âWe have noticed that there is an attrition rate with crypto, where people will put $ 500 or $ 1,000 into an exchange, but they don’t know what to do with it, or they’ll just say, ‘You know what , it’s too complicated for me. I went out, âhe said.
A staffed crypto exchange with an open door policy means customers can talk to someone almost immediately if they have a problem; online exchanges, on the other hand, have been criticized for being slow to respond to customer complaints. The physical nature of actual storefronts also breeds skeptics’ confidence in the largely unregulated crypto industry, which has become a hotbed of scams, said Baptiste Lac, co-founder of Comptoir des Cybermonnaies, a physical exchange owned at Satoshi Dev SAS. based in Bordeaux, France.
“When a newcomer arrives, in particular a more traditional investor looking to buy with his broker, he can verify on Google that we are safe, that we are approved by French regulators, that he can spend the large amount that “he might not feel safe online,” Lac said.
Unlike Coin Nerds, Comptoir des Cybermonnaies does not accept cash as it is wary of getting drawn into money laundering schemes and reluctant to break down the store’s open layout with security measures.
But for Bitcoin Store, a chain of three physical exchanges based in Croatia, accepting cash for crypto is its raison d’Ãªtre.
Croatia, which is not part of the eurozone and uses the kuna as its currency, is still a cash-rich company, according to Mario Radosevic, marketing director of Digital Assets doo, owner of Bitcoin Store. A physical exchange opens the crypto market to Croatians with cash, many of whom express distrust of banks, he said. It also acts as a sort of notice board for the company, which also offers an online service and a space where curious locals can ask any questions they have about the crypto, he added. .
Crypto ATMs, which allow users to buy and sell cryptocurrency using a bank card or cash, provide consumers with another point of contact with currencies that cannot be touched. . Some 200 crypto ATMs are operating in El Salvador, which last month became the first country to adopt bitcoin as legal tender. Citizens can also withdraw their crypto funds for cash at 50 branches of Chivo, the country’s official bitcoin wallet brand, across the country, Salvadoran President Nayib Bukele said.
More than 24,000 crypto ATMs are in service in the United States, according to the Coin ATM Radar location site. But walk-in exchanges are still rare in markets, such as the United States and Western Europe, where digital banking is ubiquitous, trust in financial institutions is quite high, and residents have unlimited access to Internet and online trading, said MichaÃ«l van de Poppe, a Netherlands-based cryptocurrency trader and consultant.
Still, storefront exchanges say they have had a good year as the value of cryptocurrencies such as bitcoin has risen and stores closed by pandemic-induced closures have reopened.
Comptoir des Cybermonnaies, the French stock exchange, has seen the volume of transactions it handles annually increase nearly six times between 2019 and 2021. Coin Nerds, meanwhile, plans to open a second location in downtown Toronto. early next year, after processing transactions last year worth C $ 152 million, equivalent to $ 119 million, up from C $ 15 million in 2019 and C $ 10 million in 2018, said Mr. Hack.
“We’re not going to have a digital revolution, for lack of a better term, without everyone participating in the ecosystem,” he said. “A lot of people still understand the concept and they still want to learn how to use it.”
Write to Katie Deighton at [email protected]
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