Virginia-based Blue Ridge Bank partnered with ATM operator BluePoint ATM Solutions and LibertyX, provider of Bitcoin ATM Software, to allow customers to buy cryptocurrency directly from ATMs.
Customers at Charlottesville, Virginia can buy and redeem bitcoin in its 19 ATMs and an 8% fee will be charged on the transactions.
Blue Ridge Bank’s announcement came in as banks and regulators appear to be using digital assets and bitcoin continues to gain value and attention. The number of bitcoin ATMs surged last year as the pandemic has increased the need for contactless payments. Blue Ridge Bank joins the small list of banks that are interested in serving the bitcoin community. A New York-based bank, Quontic Bank launched a bitcoin rewards debit card.
BNY Mellon, the largest custody bank in the US, said that it will hold, transfer and issue cryptocurrencies on behalf of its asset-management clients. Mastercard said it would support certain digital assets on its network this year. JP Morgan and Chase announced last spring that they would extend banking services to cryptocurrency exchanges Gemini and Coinbase.
"Blue Ridge Bank is excited to continue its evolution to serve the growing needs of our current and future customers," Brian Plum, CEO of Blue Ridge Bank, said in a statement. "The ATMs remain able to serve cash-based and inquiry activity. This is simply layering on more services and reinforces our commitment to the future of banking for all customers," added Plum.
“Anyone can use the bank's ATMs to buy and sell bitcoin as long as their ATM card is accepted,” said Wade Zirkle, CEO of BluePoint ATM Solutions.
“The bank’s dual-functioning capability of servicing cash as well as providing bitcoin transactions at its ATMs is unique,” said David Tente, executive director of the US, Canada, and Americas for the ATM Industry Association. "There are many that perform traditional cash transactions, as well as electronic bitcoin transactions," added Tente.
"This is a major milestone in the adoption of bitcoin as a fungible currency," Stephen Mathai-Davis, co-founder and CEO of quantitative investment research and analytics company Q.AI, said in an email. "The true challenge for digital assets remains the custody process. How do I save my digital assets in a location that I can trust and will offer true transparency into its value? The decision by Blue Ridge offers this solution while also offering the ability for users to begin converting bitcoin into US dollars in the same way many of us would go to a bank to convert foreign currencies," added Mathai-Davis.
“Blue Ridge currently has $2.8 billion in assets after it completed a merger with Richmond-based Bay Banks last year and adopted the service to further evolve for the next generation of customers,” shared Plum.
In an interview, Plum said that the bank didn’t act in response to requests from its current customer base.
“You do have a growing interest in cryptocurrencies,” Plum said. “It doesn’t diminish what we can do with our current ATMs, it’s not like this was a matter of substitution.”
Anti-money laundering watchdogs have warned of the potential for illegal activity posed by bitcoin ATMs. In June 2020, a report from CipherTrace said that bitcoin ATMs were used to send money to “high-risk exchanges” which are known for facilitating criminal activity.
“So to avoid illegal activities, the ATM limits for bitcoin purchases are rounded off to $5,000 per day,” said Justin Pence, chief operating officer of BluePoint. “Customers buy bitcoin with a bank-issued debit card,” he added.
“In April last year, Blue Ridge extended a Paycheck Protection Programme loan to MobileCoin but the bank does not have a core crypto banking team yet,” said Plum.
“We are open and pursuing what makes the most sense for us based on economics and the regulatory environment,” Plum said about the potential additional crypto services in the future.
“It is a volatile space. If you think about commercial banking it is anything but a volatile business. A lot of what’s happening in crypto right now is exciting, but you need to have the infrastructure in place,” concluded Plum.