There are countries with vast experience in the technology and industrial sector, where it serves as one of the major key indexes in their GDP and Japan is one of the front runners in that space and the use of the crypto automated teller machine (ATM) in the early stages of the blockchain and cryptocurrency revolution.
Due to their advancement in technology, people were able to seamlessly use these ATMs for instant financial transactions and thereby set a pace for other economies to follow.
However, in 2018 when the cryptocurrency market experienced several hacking crises, the Japanese government opted to halt the use of crypto ATMs for transactions.
What is a crypto ATM?
In general, most people attribute crypto ATMs as an internet-enabled kiosks where users can exchange deposited cash for cryptocurrencies and vice versa.
While they are known as Bitcoin ATMs, they can exchange cash for a range of other cryptocurrencies including Litecoin, DigiByte, Lightning BTC, Dash, Dogecoin, and more.
These ATMs can also be used to make payments for certain transactions across global platforms all over the world where the merchants accept crypto as payments.
This simply works on the blockchain technology principles of using quick response (QR) codes to upload the transaction details and subsequently facilitate the transaction in a seamless way.
How secure are crypto ATMs?
There are several ways in which the crypto ATMs can execute or implement the verification of identity for users of the machines in order to avoid any form of criminal activities, although this depends on the size of the transaction being executed by the user.
The machine could be set to request the following as a KYC requirement for the transaction like your mobile phone number or email address in order to send you a verification code or they may scan an official form of identification such as your driving license.
In some cases, the machines might request biometric scans like palm, fingers, or facial recognition techniques.
These in turn are sent to a database where authentication is reviewed and validated in order for the transaction to be completed.
This helps to track transactions especially to fight against fraud and money laundering activities by criminals who intend to use such platforms to perpetuate their criminal activities.
Why did Japan close the ATM Kiosks in 2018?
Most people, especially those who were not actively involved in the crypto space in 2018, would not actually know what transpired that led to the closure of the crypto Kiosks located in strategic locations in Japan.
A major crypto merchant platform “Coincheck” got hacked by criminals and drained over $500 million worth of cryptocurrencies causing a high level of concern to the Japanese government in 2018.
As a country known for its financial prudence, the government took a hard but decisive step to halt all forms of crypto trading temporarily and especially the use of Automated teller machines (ATM) all in the way to curb the high level of vulnerability associated with the cryptocurrency kiosks as at that time.
What has changed in 2022 for the reuse of crypto kiosks?
Indeed four years is a long time to bring about a massive transformation in any endeavor or business, especially in the blockchain technology and cryptocurrency space.
There are several Japanese companies that have carried out extensive research on the best way to implement a more secure authentication on crypto transactions by deploying crypto kiosks to various locations in the country.
One such crypto exchange is the local company “Gaia Exchange” which has been in business in Japan with vast experience.
They have agreed to install crypto kiosks across the country starting from the cities of Osaka and Tokyo, which have a high number of crypto users, and eventually, move further inland to other cities and communities where the facilities would be of immense benefit to the users.
It was stated by the company that the machines will enable Japanese consumers to withdraw a maximum of 100,000 yen ($747) per transaction, while the max cap for 24 hours will be 300,000 yen ($2,240). This is part of the measures derived as a way to curb all forms of money-laundering as provided by the financial regulatory body to the Gaia exchange management.
The Gaia exchange has also set all major reforms for user security and a major internal control system to avoid any form of a security breach within their system and thus making the kiosks very secure and safe to carry out transactions.