Key Points
- Chico, California is preparing for new Bitcoin ATM rules in line with upcoming state-level legislation.
- The new regulations, set to take effect in 2025, aim to address concerns over high fees and potential fraud.
Chico, a city in Butte County, California, is preparing to implement new rules for Bitcoin ATMs. This move is in anticipation of upcoming state-level legislation and local ordinances. The state of California is leading a broader effort to establish comprehensive cryptocurrency regulations, expected to roll out in 2025.
California is home to 2,872 cryptocurrency ATMs spread across various areas. Among these, the City of Chico boasts 347 active machines, a number surpassing the total ATMs in some large economies, such as Hong Kong.
Concerns Over High Fees and Fraud
An October 2023 legislative investigation in California revealed some ATMs were charging exceptionally high fees, with premiums reaching up to 33%. Furthermore, many Bitcoin ATMs allowed transactions as high as $50,000. During a recent local government committee meeting, Butte County’s Chief Administrative Officer, Andy Pickett, expressed concern over potential fraud and consumer exploitation. He emphasized the need for state-level regulation to address these issues.
In October 2023, California’s Governor Gavin Newsom signed the Digital Financial Assets Law, which includes Bitcoin ATM regulation. This law imposes several strict rules, such as a $1,000 cap on daily ATM deposits, mandatory receipt issuance, and disclosure of the operator’s details. The law is set to take effect in July 2025.
Bitcoin ATM Regulations
The new legislation will treat Bitcoin ATMs more like traditional banks, imposing strict regulations. Operators and store owners will be required to obtain special registration, publicly list assets and liabilities, report convictions or bankruptcies, and conduct regular audits. Pickett noted that while state legislation provides a foundation, local ordinances will still be crucial for effective implementation. Each jurisdiction will need to develop and enforce its own rules to regulate Bitcoin ATMs.
Data from CryptoATMRadar shows that the United States has 31,649 Bitcoin ATMs, accounting for 82.6% of the world’s machines. Canada and Australia follow with 7.7% (2,961 ATMs) and 3% (1,143 ATMs) of the global share, respectively. Interestingly, the number of active Bitcoin ATMs worldwide has been declining since May, a trend unseen since July 2023. This decrease is attributed to various factors, including a waning enthusiasm for cryptocurrencies amid a broader market downturn.
Bitcoin, the leading cryptocurrency, has seen its value fall more than 22% from its all-time high of $73,750, reached in March. This month has been particularly challenging, with prices dipping below $50,000. However, the market has shown some recovery today, with Bitcoin currently trading around $57,000.
