As we dive into the final section of our three-part series on Bitcoin ATMs in the United States (check out parts I and II here and here), we’re going to be looking at states R-Z. Well, W anyway. Unless you can think of some states that start with X, Y, or Z. Boy, do we have some doozies for you today! Keep reading to learn about some of the most interesting Bitcoin ATM regulations yet.
First up on our list of Bitcoin ATMs in the United States Part III is Rhode Island. The smallest state in the U.S. is big on Bitcoin. The state has yet to assess or implement any specific regulations regarding the operation or use of Bitcoin ATMs, so operators and users alike will find it easy and convenient to do business here without a lot of pesky red tape.
With the absence of state regulations, operators must simply comply with federal regulations, ensuring that their machines are up to snuff and reassuring their market that it’s safe and secure to exchange cash for Bitcoin.
South Carolina uses some interesting (and frankly, hilarious) wording to specify that Bitcoin ATMs do not need to be licensed in the state. The Attorney General’s Money Services Division says that digital currency lacks the characteristics necessary to be a medium of exchange. Hmmm.
So, because virtual currency can’t hack it as a payment method (and we’ve proven already that it’s quite effective), these types of businesses don’t have to be licensed. I guess that works out well for those of you who live and work here!
South Dakota tried really hard back in 2021 to pass House Bill 1091, which would define digital assets as property. It died in the Chamber, so thankfully, all crypto is exempt from property taxation in the state, which is good for anyone wanting to use a Bitcoin ATM.
Furthermore, while financial banks are legally authorized to provide crypto services with a license, Bitcoin ATM operators are exempt from the same requirements. No need for a license or regulatory red tape in the state. These machines simply have to comply with any federal regulations.
Tennessee Bitcoin ATM regulations are a bit confusing. First, the Tennessee Department of Financial Institutions (TDFI) says that virtual currency lacks intrinsic value and is not legal tender. It’s not classified as money under the Tennessee Money Transmitter Act (TMTA).
Therefore, receiving crypto in exchange for the promise to make it available later is not a money transmission. Which is what most Bitcoin ATMs do, right? BUT…
The TMTA does control transactions that meet the criteria for a few exceptions. One of those exceptions is the exchange of crypto for sovereign currency (for example, USD) through a third-party exchanger. Another exception is the same exchange through an automated machine.
Uh oh. So now Bitcoin ATM operators have to navigate these muddy waters to figure out whether they should be licensed to operate in the state of Tennessee or not. There’s a whole lot more to it, but for the sake of simplicity, what you really need to know as a consumer is that Bitcoin ATMs are legal and authorized in the state, and you can still conduct your transactions as normal!
In the sprawling state of Texas, Bitcoin ATM regulations fall under the jurisdiction of the Texas Department of Banking. Texas is a state that has been very proactive in establishing clear guidelines for operating Bitcoin ATMs. This ensures a safe and reliable experience for all.
Because Texas recognizes crypto as a form of money, ATMs are subject to the same regulations that govern money transmission services. Any company operating a Bitcoin ATM must obtain a license to do so because they are considered a money transmitter.
There are plenty of criteria with which these operators must comply, including maintaining a minimum net worth, providing a surety bond, and implementing an Anti-Money Laundering (AML) program. To keep their license, they have to undergo regular examinations for compliance.
Along with New Mexico, Texas was one of the first states to host a Bitcoin ATM. However, Texas’s claim to fame is the first Bitcoin ATM that allowed you to sell your Bitcoin back for cash, and it opened up in Austin in early 2014, roughly a month after the first location in Albuquerque.
Utah, known for its stunning landscapes and growing technology sector, has seen a steady rise in Bitcoin ATMs, but it’s another state that doesn’t have any regulations governing the operation of use of Bitcoin ATMs. So if you live here, you can enjoy your Bitcoin ATMs so long as you do your own research to make sure they’re safe and the operator complies with federal regulations.
In Vermont, crypto is legally classified as property instead of currency. That can be both good and bad. Because it’s property, it’s subject to property taxes. However, because it’s not money, it doesn’t fall under the jurisdiction of any money transmitter laws.
Thus, Bitcoin ATM operators don’t need a license to operate in the state, making these machines readily accessible and easy to use.
The state of Virginia is a huge proponent of supporting the growth of digital currency. A bill passed by the General Assembly of the Commonwealth of Virginia in 2022 allows banks to provide crypto services.
In addition, the Virginia Blockchain Council (yes, they have a council) is pushing the General Assembly to prioritize collaboration with industry experts, entrepreneurs, and stakeholders. If lawmakers in the state develop a regulatory framework to balance innovation with consumer protection, it could mitigate risks and strengthen the industry.
Virginia is on the road to fostering an environment of support for all crypto services. These include Bitcoin ATMs, so access is easy, safe, and prosperous.
Washington is known for its tech-savvy population and vibrant economy. And as the FinTech giant they are, they have developed explicit regulations for Bitcoin ATMs. Any operator of a kiosk or virtual currency ATM must obtain a money transmitter license.
Following close behind New Mexico and Texas, Washington was one of the first states to open a Bitcoin ATM in Seattle in early 2014.
In the Appalachian region, West Virginia has embraced the rise of Bitcoin ATMs. Back in 2017, that state went so far as to enact a law defining cryptocurrency. The law states that cryptocurrency is a digital currency. Okay, so crypto is essentially a type of money. Now what?
Well, nothing really. A licensee under the West Virginia Fintech Regulatory Sandbox doesn’t actually have to apply for a separate money transmitter license. So Bitcoin ATMs are free to set up shop for consumers wherever they see fit.
Wisconsin has a diverse economy with plenty of Midwestern charm. And for now, Bitcoin ATMs aren’t regulated by the Wisconsin Department of Financial Institutions. However, it would seem that lawmakers and regulators are keeping a close eye on growth and usage to determine whether the state could benefit from these regulations in the future. As it stands today, a Bitcoin ATM operator does not need a license to operate.
Now we've come to the last state on our list of Bitcoin ATMs in the United States. Wyoming is one of the most surprisingly thorough states when it comes to how they view Bitcoin, Bitcoin ATMs, crypto, and how it can be used. Five bills enacted in 2018 provided an exemption for virtual currency from money transmission laws and regulations. In addition, blockchain tokens (or utility tokens) are also exempt from the same laws and regulations.
Even better is the fact that digital currency is exempt from property taxation, and utility tokens can be traded for goods and services. Plus, Wyoming goes so far as to explicitly make it legal to house and maintain corporate records on the blockchain. Way to go, Wyoming!
As Bitcoin ATMs continue to proliferate across the United States, the regulatory landscape evolves to accommodate the dynamic nature of the cryptocurrency market. State authorities play a crucial role in balancing the promotion of innovation with the need to protect consumers and maintain the integrity of financial systems, but as you can see, they’re not always up to the task.
We’ve now navigated through all 50 states, and hopefully, you’ve learned a lot about your own state! Now it’s time to go get that Bitcoin!