Walmart has quietly joined the Bitcoin train, offering customers the option to buy Bitcoin through Coinstar kiosks located in select stores. The service is a pilot program in partnership with Coinstar, a company whose machines convert loose change into cash, and Coinme, a cryptocurrency exchange platform that operates the largest crypto ATM network in the world.
Fake news released on September 13, 2021, falsely stated that Walmart had announced a partnership that would enable shoppers to pay using Litecoin. Although not confirmed, the negative blowback from this even could be the reason Walmart opted for a quiet rollout of its Bitcoin partnership with Coinstar and Coinme, rather than grabbing the headlines.
How Buying Bitcoin at Walmart Works
Although Coinstar is known for converting coins into cash and gift cards, its machines will only be converting banknotes into Bitcoin. Coins are not part of the Walmart Bitcoin conversion service.
Once you insert a banknote into the Coinstar machine, it issues a voucher with a redemption code. That code is redeemable for Bitcoin on the Coinme exchange.
To redeem it, you will need a Coinme crypto wallet. If you don't have a Coinme wallet, you can use the redemption code to set one up at the ATM on the spot. But you will have to pass a Know-Your-Customer check (KYC) before you can redeem the voucher, which means providing ID and a phone number for Coinme to check your identity.
Redeeming the voucher will not be instant. Most Bitcoin ATMs take a minimum of 30 minutes before the Bitcoin reflects in your crypto wallet.
Each Bitcoin purchase will cost a 4% transaction fee and another 7% cash exchange fee. This is an expensive way to buy Bitcoin. But offering the service at Walmart helps bring Bitcoin closer to first-time buyers of crypto and lends Walmart's credibility to the PR battle to overcome the skepticism around Bitcoin that persists.
Buying Bitcoin at Walmart Will Drive Adoption
There is no mistaking the excitement amongst the Bitcoin community at the entry of Walmart into the cryptocurrency space. As mentioned before, this project helps bring Bitcoin closer to the masses and could help to drive widespread acceptance. In partnership with Coinme, Coinstar plans to offer Bitcoin at more than 8,000 of their kiosks across the United States.
Cryptocurrencies have tremendous potential to provide financial services to everyone on the planet, especially those who cannot access the traditional banking system. However, a study published by crypto exchange Gemini showed that only 14% of the US population owns cryptocurrencies, and only 2% of bitcoin wallets own 90% of all the Bitcoin available.
According to the Federal Reserve, approximately 25% of American adults are underbanked or unbanked. Worldwide, about 2 billion people are unbanked. To bring more people into the crypto world, people holding cash need to easily move between crypto and fiat currencies such as dollars and euros without requiring a bank account or a credit card. Hence the importance of these machines.
There are concerns that the widescale availability of Bitcoin ATMs will increase money laundering due to the potential of the machines to attract money mules, human traffickers, and various criminals. However, this is mitigated by the KYC requirements, the fact that Coinstar's machines have cameras, and that they also automatically report transactions above a certain amount to the authorities.
Overall, the partnership between Walmart, Coinstar, and Coinme to provide Bitcoin at ATMs is a step in the right direction. In the months and years to come, the transaction costs should lower significantly to boost adoption even further.