Their owners say that physical exchanges improve the experience of buying and selling cryptocurrencies
A new kind of shop can be found in a small business park in Mississauga, Ontario, near a dentist, a Pizza Hut, and a Vietnamese restaurant. It looks like a small local bank, or perhaps a currency exchange operator, with a brightly lit waiting area, a reception desk and cubicles surrounded by bullet-resistant glass.
But Coin Nerds Inc. Offers visitors something that other financial storefronts usually don’t: cryptocurrency.
The store’s owners, which opened in 2018, belong to a small crop of entrepreneurs who believe virtual currency has a place both offline and on Main Street.
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“We allow individuals from all walks of life to be able to participate in this digital asset ecosystem, without the hassles of attempting to onboard with self-service online exchanges, not to mention the technical hurdles that a People of certain ages can experience it,” said Adam Hack, CEO and founder of CoinNerds.
Brick-and-mortar crypto exchanges all operate a little differently, but their basic premise is that customers can walk down the street and buy various cryptocurrencies with cash, credit card or bank transfer. The stores teach new customers how different digital currencies work and guide them through the process of setting up a digital wallet that the investor controls through an app. And when customers want to exchange their digital coins for local currency, the exchange counter can handle it for them.
Exchanges charge fees ranging from 0.99% to 5% for each transaction, which is slightly higher than the fees charged by large online exchanges.
Their owners say that physical exchanges improve the experience of buying and selling cryptocurrency, which usually takes place through online exchanges such as Coinbase Global Inc. or operated by Binance Holdings Limited. Such platforms can be popular, but can be off-putting for those who are not a whole lot. Well versed in the crypto markets, Mr. Hack said.
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“We saw that there is an attrition ratio with crypto, where people will onboard $500 or $1,000 to an exchange, but they don’t know what to do with it, or they’ll just say, ‘You know it’s too complicated. for me. I’m out’,” he said.
An employee crypto exchange with an open-door policy means customers can talk to anyone almost immediately if they have a problem; Conversely, online exchanges have been criticized for being slow in responding to customer complaints. The physical nature of real-life storefronts creates confidence in skeptics of the largely unregulated crypto industry, which has become a hotbed of scams, said Baptiste Lack, co-founder of Comptoire des Cybermonies, a physical exchange owned by Satoshi Dev SAS. . Based in Bordeaux, France.
“When a newcomer comes in – especially a more traditional investor looking to buy with their broker – they can check Google to see that we are safe, that we are licensed by French regulators, that they can spend huge amount which they may not feel safe spending online,” said Mr. Lakh.
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Unlike Coin Nerds, Comptoir des Cybermonnaies does not accept cash, as it is wary of getting caught in money-laundering schemes and is reluctant to sabotage the store’s open plan layout with security measures.
But for Bitcoin Store, a chain of three physical exchanges based in Croatia, accepting cash for crypto is its ration d’etre.
Croatia, which is not part of the eurozone and uses the kuna as currency, is still a cash-heavy society, according to Mario Radoसेevi, chief marketing officer of Digital Assets Do, which owns a bitcoin store. A physical exchange opens up the crypto market to cash-carrying Croatians, many of whom express distrust in the banks, he said. It also serves as a billboard for the business, which also offers an online service, and a place where curious locals can ask any questions they have about crypto, he said.
Crypto ATMs, which allow users to buy and sell cryptocurrencies using bank cards or cash, provide another touchpoint for consumers with currencies that cannot be touched. There are about 200 crypto ATMs operating in El Salvador, which last month became the first country to adopt bitcoin as legal tender. Salvadoran President Nayib Bukele has said that citizens can also withdraw their crypto funds in cash from 50 staffed branches of Chivo, the country’s official bitcoin wallet brand.