The ATM Industry Association (ATMIA) has released a new report that aims to encourage the nascent bitcoin ATM sector to adopt standards that promote consumer protection and security.
The paper is the second report issued by the non-profit industry association on the subject of bitcoin ATMs this year, following a March release that assessed how both bitcoin and bitcoin ATMs could more broadly affect the traditional ATM market.
Building off the first release, the most recent report suggests that the bitcoin ATM industry needs to adopt methods of self-governance now, before its products are disseminated more widely.
Further, the ATMIA argues that the bitcoin ATM industry should turn to the traditional financial system for guidance as it navigates this process.
The ATMIA wrote:
"Our main conclusion is that there is currently insufficient supervision of bitcoin ATMs. These machines should be brought into the fold of the wider ATM industry, becoming part of the industry, subject, in particular, to security best practices and other aspects of the industry’s code of conduct."
In remarks, ATMIA CEO Mike Lee stated he hopes the report will encourage the bitcoin ATM industry to join the wider ATM industry, and for the sector to form relationships with traditional ATM operators who may be able to offer valuable expertise.
The comments echo findings from a joint ATMIA and Electronic Funds Transfer Association (EFTA) report issued in May that also suggested a collaborative approach would be beneficial for both business sectors.
In particular, the ATMIA issued a set recommendations for how it believes the bitcoin ATM industry could best regulate itself to instill consumer trust and bolster security.
The ATMIA suggested the bitcoin ATM industry should:
- Create conditions for a 'license to operate' for bitcoin ATMs
- Develop international security best practices to fight cybercrime and money laundering
- Foster relationships with the wider payments and ATM industry
- Start an international accreditation program from bitcoin ATM operators.
The report went on to propose precisely how the industry could self regulate, which included establishing a registry of bitcoin ATM machines with licensing powers for operators and the ability to guarantee deposits, among other capabilities.
The ATMIA added: "We recognize the need for some sort of self-regulation at least for part of the bitcoin value chain."
An important innovation
While direct in its proposals, the ATMIA praised bitcoin in its report, suggesting that the digital currency could evolve to become an attractive solution for the global remittance market.
The ATMIA wrote:
"In short, we are seeing signs of typical 'creative destruction' of a genuine innovation in the payments space."
The non-profit went on to state that bitcoin ATM manufacturers and operators could become a vital part of this ecosystem, provided they move to provide transparency and ensure that consumers understand all the risks involved with the use of their products.
The report concluded that the future is bright for bitcoin, even though the bitcoin ATM industry has challenges to confront:
"Looking ahead, the jury is out as to whether bitcoin will ever become a mainstream currency. It does appear to be on track, however, for becoming an important global currency."