Terminals Across Ukraine Now Offer Bitcoin for Cash

5,000 Terminals Across Ukraine Now Offer Bitcoin for Cash

Joon Ian Wong (@joonian) | Published on July 8, 2014 at 18:00 BST

A nationwide network of more than 4,900 payment terminals in the Ukraine now allows customers to easily buy bitcoin for cash.

The network, which is operated by the country’s National Credit Bank, allows customers to buy vouchers for bitcoin from a new company called BTCU.

After depositing cash in a terminal, purchasers receive a voucher containing an activation code either on a printed receipt or via an SMS message to their phones. They can then go to BTCU’s website to enter the activation code and claim their bitcoin.

The machines, known as BNK-24 terminals, also allow users to pay utility bills and purchase mobile phone credit, among other functions.

BTCU launched the service this month, according to a co-founder of the company who wanted to be known only as Stanislav. He said:

“Our aim is to give Ukrainian people the possibility to join the bitcoin ecosystem.”

Bank confirms bitcoin service

The National Credit Bank executive in charge of its payment terminal business, Evgeniy Dumchev, confirmed that the machines now allow users to buy bitcoin.

According to BTCU’s Stanislav, there is pent-up demand in Ukraine for a cheaper, more convenient payment system to settle overseas e-commerce transactions.

“Young Ukrainians are used to buying goods from [online] shops abroad, for example, in China. If someone needs to pay $100 for a buggy for his child, he needs to pay about $40 for SWIFT payments and spend half the day at the bank. We’ve opened a window to the world to help people survive,” he said.

Stanislav would not give details on BTCU’s transaction data from from the BNK-24 terminals. He did confirm, though, that BTCU’s rates – which are about 3.5% – are at a slight premium to those asked by Bitstamp. He said that a popular reddit post that described using a terminal to buy bitcoin, and claiming that there was a markup of 10-15%, for the service, was inaccurate.

Murky legal status

The Ukrainian government issued legal guidance for bitcoin businesses in February, stating that firms have to register with the government in order to operate.

Nevertheless, companies in the bitcoin space say the guidelines are not definitive, and continue to operate with a degree of vagueness. The National Credit Bank’s Dumchev, for example, said:

“The process is quite grey according to Ukrainian legislation.”

Stanislav echoed a similar sentiment, saying that there is no law in Ukraine explicitly prohibiting the use of bitcoin and that the Ukrainian government’s actions spurred him to promote the use of bitcoin as a “tool for common people”, in the face of government control.

“For us, bitcoin is more than a way of transferring money. It is an ideology of free people. [A government's] attitude to bitcoin is a litmus test, it shows the true face of the government. That’s why we support bitcoin,” he said.

Kiev image via Shutterstock. Terminal image courtesy of Roman Skaskiw.