Canadian cryptocurrency exchange Coinsquare has bought a controlling stake in payments startup Just Cash, which has developed a technology that allows consumers to buy bitcoin via regular, non-bank operated ATMs.
The company invested “eight figures” in the deal, Kalman Gabriel, head of business development at Coinsquare, told ATM Marketplace. Coinsquare would not disclose any other details of the deal.
Just Cash, based in St. Louis, enables cryptocurrency purchases with a bank debit card. The transaction is possible with a software update to the ATM, without any additional hardware.
The service works similarly to any other debit card transaction, Gabriel explained. After the consumer inserts their debit card into the ATM, they are given the option to withdraw cash or to purchase one of several cryptocurrencies, including bitcoin. Upon approval of the transaction, the ATM prints out a receipt with a public key, a private key, and a QR code.
“It is as easy as it could possibly be,” he said.
Coinsquare, which operates out of Toronto, plans to launch the service globally, starting with the U.S. The company claims it has partnered with two major producers of non-bank ATMs, though it would not disclose which ones. The hope is that this will open the doors to installing the service on some 170,000 machines, or half of all the non-bank ATMs across the US.
“It can also work on ATMs outside of US, but we think we can deploy [the service] relatively quickly through our manufacturing partners,” Gabriel said.
If true, that would put the crypto exchange on track to outnumber the 5,000 bitcoin ATMs currently in existence around the world.
The company said the service is working on some ATMs now, and it plans a nationwide rollout this quarter.
The ATM deployer benefits by receiving a portion of the cryptocurrency transaction fee, while Coinsquare acts as the liquidity provider, selling the cryptocurrency to the consumer. “That is one of the synergies of our partnership,” Gabriel noted.
Coinsquare has a sponsor bank, which is critical to doing transactions on the ATM rails. The company said it has also registered with FinCEN in the U.S. as a money services business. The service only allow crypto purchases up to $1,000 per day, and customer identity checks are done through the users’ debit card.
“This is not like a bitcoin ATM machine, where no one knows who the person is. You don’t need to provide any sort of ID. This is like any ATM transaction,” he said.
Cole Diamond, CEO at Coinsquare, thinks the service will lift mainstream adoption of bitcoin. “By using the millions of existing ATMs around the world, we can now bridge the gap and give new users the easiest and most familiar experience to purchase cryptocurrency,” he said in news statement.
Just Cash will continue to operate independently under the Coinsquare brand. The move comes as Vancouver is considering a ban of Bitcoin ATMs, due to their ties with money laundering. Earlier this year, Coinsquare announced the launch of its own stablecoin, eCAD, pegged to the Canadian dollar. The company laid off 40 employees, nearly 30% of its staff, in February.