Walk-in Cryptocurrency Exchanges Emerge Amid Bitcoin Boom

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Cryptocurrency storefront operators say in-person advice and a physical presence build trust among those unlikely to invest online

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The store’s owners, which opened in 2018, belong to a small crop of entrepreneurs who believe virtual currency has a place both offline and on Main Street.

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“We allow individuals from all walks of life to be able to participate in this digital asset ecosystem, without the hassles of attempting to onboard with self-service online exchanges, not to mention the technical hurdles that a People of certain ages can experience it,” said Adam Hack, CEO and founder of CoinNerds.

Brick-and-mortar crypto exchanges all operate a little differently, but their basic premise is that customers can walk down the street and buy various cryptocurrencies with cash, credit card or bank transfer. The stores teach new customers how different digital currencies work and guide 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.

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Exchanges charge fees ranging from 0.99% to 5% for each transaction, which is slightly higher than the fees charged by large online exchanges.

Their owners say that physical exchanges improve the experience of buying and selling cryptocurrency, which usually takes place through online exchanges such as those operated by Coinbase Global. Inc.

or Binance Holdings Ltd. Such platforms may be popular, but may be off-putting for those not fully versed in the crypto markets, Mr. Hack said.

“We saw that there is an attrition ratio with crypto, where people will onboard $500 or $1,000 to an exchange, but they don’t know what to do with it, or they’ll just say, ‘You know it’s too complicated. for me. I’m out’, he said.

An employee crypto exchange with an open-door policy means customers can talk to anyone almost immediately if they have a problem; Conversely, online exchanges have been criticized for being slow in responding to customer complaints. The physical nature of real-life storefronts creates confidence in skeptics of the largely unregulated crypto industry, which has become a hotbed of scams, said Baptiste Lack, co-founder of Comptoire des Cybermonies, a physical exchange owned by Satoshi Dev SAS. . Based in Bordeaux, France.

“When a newcomer comes in – especially a more traditional investor looking to buy with their broker – they can check Google to see that we are safe, that we are licensed by French regulators, that they Can spend huge amount which they may not feel safe spending online,” said Mr. Lakh.

Unlike Coin Nerds, Comptoir des Cybermonnaies does not accept cash, as it is wary of getting caught in money-laundering schemes and is unwilling to sabotage the store’s open plan layout with security measures.

But for Bitcoin Store, a chain of three physical exchanges based in Croatia, accepting cash for crypto is its ration d’etre.

Croatia, which is not part of the eurozone and uses the kuna as currency, is still a cash-heavy society, according to Mario Radoसेevi, chief marketing officer at Digital Assets Do, which owns a bitcoin store. A physical exchange opens up the crypto market to cash-carrying Croatians, many of whom express distrust in the banks, he said. It also serves as a billboard for the business, which also offers an online service, and a place where curious locals can ask any questions they have about crypto, he said.

Crypto ATMs, which allow users to buy and sell cryptocurrencies using bank cards or cash, provide another touchpoint for consumers with currencies that cannot be touched. There are about 200 crypto ATMs operating in El Salvador, which last month became the first country to adopt bitcoin as legal tender. Salvadoran President Nayib Bukele has said that citizens can also withdraw their crypto funds in cash from 50 staffed branches of Chivo, the country’s official bitcoin wallet brand.

According to locator site Coin ATM Radar, there are over 24,000 crypto ATMs operating across the US. But walk-in exchanges are still uncommon in markets such as the US and Western Europe, where digital banking is ubiquitous, trust in financial institutions is high and residents have seamless access to the Internet and online exchanges, said Michael van de Pope, A cryptocurrency trader and advisor based in the Netherlands.

Still, storefront exchanges say they’ve had a good year, as the value of cryptocurrencies like bitcoin soared and stores closed by the pandemic-induced lockdown reopened.

French exchange, Comptoire des Cybermoneys, has seen a nearly six-fold increase in transaction volume between 2019 and 2021. Coin Nerds, meanwhile, plans to open a second location in downtown Toronto early next year, with $152 processed trades last year. million Canadian dollars, equivalent to $119 million, up from C$15 million in 2019 and C$10 million in 2018, Mr. Hack said.

“We are not going to have a digital revolution, for lack of a better term, without everyone participating in the ecosystem,” he said. “Many people are still understanding the concept and they still want to learn how to use it.”

[email protected] . on Katie Deighton

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