State-Endorsed Bitcoin ATM Regulations Coming to California County

Chico, California, is gearing up to better regulate Bitcoin ATMs through a combination of state legislation and local ordinances. This move aims to address fraud and enhance consumer protection. On August 7, Andy Pickett, the chief administrative officer of Butte County, discussed ongoing efforts to regulate Bitcoin ATMs during a local government committee meeting.

Pickett highlighted recent state-level legislation aimed at reducing fraud associated with Bitcoin ATMs. This legislation is a response to a California legislative investigation from October 2023, which revealed some crypto ATMs were charging exorbitant premiums of up to 33% and had transaction limits as high as $50,000. As a result, a new bill was passed to cap daily deposits at $1,000 and mandate receipts and disclosure of operator names for all crypto ATM transactions.

Upcoming Changes and Local Ordinances

The significant legislative change, as noted by Pickett, will take effect in July 2025. This bill will regulate Bitcoin ATMs similarly to traditional banks. “The bigger impact is a bill that will take effect in July 2025, which will regulate the use of Bitcoin ATMs treating them more like a bank,” said Pickett.

Locally, Chico plans to introduce ordinances to regulate these machines further. However, Pickett mentioned the potential legal challenges these local ordinances might face. “Each jurisdiction would need to pass their own ordinance to regulate the Bitcoin machines, and any ordinance would likely be challenged in court,” he added.

Chico currently hosts 347 active crypto ATMs, a notable number compared to major economies like Hong Kong, Spain, Poland, and New Zealand. The United States leads the global Bitcoin ATM network, boasting 31,649 machines, accounting for 82.6% of the worldwide total. Canada follows with 2,961 ATMs (7.7%), and Australia ranks third with 1,143 ATMs (3%).

California alone has 2,872 crypto ATMs across various jurisdictions. However, the global network saw a decline in July when 660 crypto ATMs were removed, marking the first decrease in Bitcoin ATM installations this year.

The coordinated effort between state legislation and local ordinances in Chico signifies a proactive approach to regulating the burgeoning crypto ATM industry and ensuring consumer safety.