Bitcoin ATMs Reprise a Painful History in Finance

Joint Center President Dedrick Asante-Muhammad co-authored an op-ed with Better Markets President and CEO Dennis Kelleher published in the Financial Times. The op-ed focused on the GENIUS Act and how Bitcoin ATMs are impacting minority and low-income communities.

Read the full op-ed below.

Bitcoin ATMs reprise a painful history in finance
The machines located in Latino, Black and low-income neighbourhoods offer a promise of inclusion but involve high costs

The marketing of crypto has long held out the promise of financial inclusion and empowerment to those left out and left behind. It is an appealing message, but when profit is prioritised over the most basic protections, that promise turns into peril.

That is the case with the spread of bitcoin ATMs. The US is the world leader in hosting these machines with 30,000 installed around the country — about 81 per cent of the global total, according to research from crypto platform Finbold.

These ATMs seem to be clustered in Latino, Black and low-income neighbourhoods, according to a Bloomberg analysis, much like payday lenders and cheque-cashing services. Providers have denied targeting areas based on any racial profile. But the apparent disproportionate placement is increasingly being recognised as a cause for concern.

An FBI report in April revealed that 10,956 complaints arose from bitcoin ATMs in 2024, up 99 per cent from the previous year.

The typical structure and operation of bitcoin ATMs present risks to the communities in which they are located. The machines appear mostly to be just one-way, allowing cash-to-bitcoin transactions only. This in effect locks users into a highly volatile asset with no way to exchange their holdings back to dollars.

And the fees? Total fees at bitcoin ATMs of as much as 20 per cent — including transaction and exchange rate costs — may not be uncommon just to make a purchase, according to a study by the Federal Reserve Bank of Kansas City. That means the price of bitcoin must rise more than 20 per cent before the buyer can break even.

What is worse is that once a person converts cash to bitcoin, it is often very expensive to convert it back or buy something with it. Using bitcoin to buy anything, much less something useful such as milk, a sandwich or gas, is only very rarely available and comes with pricey transaction fees that tend to be more expensive for smaller purchases. The same is true for crypto trading platforms that allow users to convert their crypto to dollars, making these far from an inclusive or affordable solution for the underbanked.

This is the latest chapter in a long, painful story of banking in the name of economic inclusion: products marketed and sold to marginalised communities under the guise of empowerment but are ultimately extractive.

The minority and low-income communities where many bitcoin ATMs are located are rightfully suspicious of traditional financial institutions, given they have been historically subject to economic exclusion, exploitation and predation. These same communities are now once again left vulnerable by emerging regulatory frameworks that are weak and insufficient.

Despite all the risks, the recently enacted Genius Act does not do anything to address the consumer protection issues raised by bitcoin ATMs. It does nothing to ban one-way cash-to-crypto kiosks or require them to provide buyback options. It does nothing to cap fees, nor does it mandate effective and meaningful disclosure of pricing, fees, risks and restrictions. It does not provide a taxonomy of dealer responsibilities. Finally, the geographic targeting of financially vulnerable communities with wealth extracting, predatory products or services needs to be prohibited.

Regulatory holes allow the crypto industry to continue profiting off marginalised communities with inadequate accountability. In fact, the law and other pending crypto proposals actually limit the jurisdiction of the Consumer Financial Protection Bureau, severely restricting the regulator’s ability to address crypto payment uses and abuses (even if the CFPB survives the Trump administration’s attempt to kill it).

If policymakers are serious about building a financial system that includes everyone, then much more is needed. Lawmakers must extend strong substantive consumer protections as well as transaction transparency standards to all crypto interfaces, including bitcoin ATMs, and ban one-way kiosks.

If we continue to allow digital financial products to flourish without robust and effective guardrails, we are not closing the racial wealth divide — we are widening it with a regressive financial tool that worsens, not fixes, the disparities facing Black and Latino communities. Policymakers must ensure that claims of inclusive financial products are not just buzzwords but a reality that enables people to achieve their financial goals.

Dennis Kelleher, co-founder of Better Markets, contributed to this article.