The only live cryptocurrency automated teller machine (ATM) in the MENA region has been unveiled in the kingdom and its operator is confident that one day they will be an everyday feature within malls and on high streets across the globe.
The Crypto ATM from Basket SPC at Bahrain FinTech Bay, inside the Arcapita Building, allows people to buy and sell cryptocurrencies or coins using cash. Right now it is supporting Bitcoin and Litecoin – the two best known – and others can be added.
Basket is the brainchild of founding entrepreneur Jamal Al Mutawa, a technologist, highly-regarded telecom professional, Bitcoin investor and blockchain authority.
“I believe it (the ATM) will become common,” he said, “once more adoption takes hold and shops and commercial establishments realise how useful it is since it is person-to-person with no intermediate, coins received are immediate with no clearing period, and fees are minimal compared to other established payment networks.
“I see changes and developments in the cryptocurrency world very similar to the time when the internet became mainstream and popular.
“A lot of very smart people are building platforms and providing solutions that a few years back would be considered impossible. As an example of one of many, a new innovation using Bitcoin and other similar coins is the Lightning network.
“This allows you to pay very small amounts almost immediately. One use for this is that there would be no need for a person to subscribe to a video service like Netflix with a monthly fee. Instead you pay as much as has been consumed – if it was five minutes of a film, you’d pay just for that.”
The ATM development created a storm of interest across social media as soon as details were outlined by a Bahrain FinTech Bay executive on LinkedIn.
The reaction was overwhelmingly positive, with one top banker describing the move as ‘revolutionary’ and suggesting it would contribute further to the ‘development, awareness and acceptance of the crypto-eco system’.
A communications specialist simply said ‘proud’ and a payments & cards products manager described it as ‘such a beautiful machine’.
Anyone can use the ATM once they have gone through the registration process of ‘taking a selfie’, providing their mobile number and being approved. “Your crypto coins are referenced using a crypto wallet, usually in the form of a mobile app, the wallet accesses the blockchain and sees how many crypto coins you own,” Jamal explained. “Cash / paper bills are used to buy these crypto coins and vice versa, crypto coins can be sold to the machine and cash is paid out by the ATM.”
Jamal describes cryptocurrencies today as a form of ‘digital gold’ where owners keep their money in a manner that is ‘always available’ to them.
“It is also used for speculation, it can be used for remittances and transfers and is very easy and reliable and low cost,” he said. “It is possible to use it for online commerce and more and more e-commerce sites see the benefits and are adopting it.”
For the uninitiated, a cryptocurrency is a digital asset designed to work as a medium of exchange that uses strong cryptography to secure financial transactions, control the creation of additional units, and verify the transfer of assets.
Although he lives in Kuwait, Jamal considers Bahrain as his ‘second home’ as he lived here for a few years during his past work with Zain Group. “I came to Bahrain with my Crypto ATM project because they welcome new initiatives in FinTech similar to mine and have a very robust and comprehensive approval roadmap for these projects.”
Jamal, a former business support systems / operations support systems director at Zain Group, said that although his new business was still in the Central Bank of Bahrain’s ‘sandbox process’, he is confident that once the bank sees the operation as ‘competent and following the conditions set forth by the CBB’, Basket will be allowed to operate in Bahrain.
Basket S.P.C. is a ‘Bahraini company’ he said, adding: “Our aim primarily is to roll out and manage Crypto ATMs in Bahrain, and expand wherever the regulatory environment is friendly and welcoming in the MENA region.
“We will also include more coins on our ATMs, including local currencies when they become digital.”
The move has delighted the crypto-pioneers at Bahrain FinTech Bay. CEO Khalid Saad said: “Basket is currently testing their solution under the Central Bank of Bahrain’s Regulatory Sandbox. This is a great addition to Bahrain’s growing crypto ecosystem.”
Bahrain FinTech Bay recently celebrated its first anniversary confident it can continue accelerating local early-stage FinTech companies to their next stage of development, as well as attracting foreign ‘growth-stage’ FinTech companies to Bahrain.
Since its launch, to date, it has attracted 75 local and international partners, eight venture acceleration platform partners and published several in-depth market ecosystem reports.
After successfully creating a physical hub located at Bahrain Bay for co-creation and the sharing of resources and ideas, it has ambitious plans to attract even more young FinTech brains into the arena.
As reported in FinTech Focus, The CBB has granted a number of licenses under the sandbox regulation framework in the kingdom, setting the stage for much-awaited acceptance by regulators, banks and currency exchange houses in the region that have been weary of transacting with digital currencies.
A regulatory sandbox is a framework and process that facilitates the development of the FinTech industry in a safe and calculated way. New business models in the sector can create regulatory ambiguity, therefore, regulatory clarity is critical to innovators in order to bring compliant services to market.
In effect, the sandbox creates a virtual safe space in which both start-ups and established businesses can trial and refine innovative products, services, platforms and business models in a live but controlled environment, where risks to customers and the wider financial system are mitigated, giving regulators time to adapt legislation as needed.
Whilst in the regulatory sandbox, companies are required to adhere to CBB regulations including Know Your Customer, Anti-Money Laundering and Countering Financing of Terrorism, as well as follow appropriate disclosure, protection and compensation requirements related to their customers.
The move has marked the arrival of a new wave of forward-looking regulation around digital asset trading in the region that is geared toward creating an environment to encourage FinTech innovation and inclusion, while ensuring the best interests of the nation, the banking system, investors and customers are protected.
A short-lived unofficial Crypto ATM is believed to have been set up in Dubai back in 2014 but was unlicensed and closed down. That is why Bahrain can proudly boast ‘the only live one in the region’ and under the framework of the regulator. “These ATMs will grow in popularity down the road,” Khalid also predicted.
In fact, the number of crypto ATMs installed worldwide has surged past the 4,000 mark, data from industry statistics aggregator Coin ATM Radar indicated earlier this year.
Around 70 per cent are located in North America, 23 per cent are in Europe, and 2.6 per cent in Asia. 1.3 and 1.1 per cent are in Oceania and South America respectively, and just 0.2 per cent are located in Africa.
Within Asia, Hong Kong has the lion’s share of them – accounting for 0.8 per cent of machines worldwide – while in Europe it is Austria (6.4 per cent), closely followed by the UK (4.8 per cent).
While the vast majority support Bitcoin (BTC) – 99.9 per cent, or 4,162 – 64.6 per cent support one or more altcoins.
These break down to 59.5 per cent support for Litecoin (LTC), 49.3 per cent support for Ethereum (ETH) and 33.9 per cent support for Bitcoin Cash (BCH). Dash (DASH) is supported by 17.9 per cent of ATMs, while Monero (XMR), Dogecoin (DOGE) and ZCash (ZEC) are each supported by three per cent or less.
Conspicuously absent from Coin ATM Radar’s global statistics is India. Last November, the developers of the country’s first Bitcoin ATM were arrested in the city of Bangalore under criminal charges due to its ATM label, as the machine was not strictly an ATM but a device that aimed to allow crypto-users to circumvent banking channels.
The arrests came after the Reserve Bank of India’s spring 2018 prohibition on banks’ dealings with crypto-related firms.
Earlier this month, Cointelegraph reported that Bitcoin ATM manufacturer Lamassu has relocated to Switzerland, due to regulatory difficulties in other countries.
For more details, follow @basketbahrain on Instagram
Stanley Louis Szecowka
Editor/Journalist & Blogger, Restaurant & Motors Reviewer, FinTech Writer, Manager, Trainer.
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