Towards the disappearance of ATMs in France: Can crypto benefit from it?

Cash, that faithful companion of daily transactions, seems to be slowly crumbling in France and Europe. With the massive closure of ATMs, is physical money bidding farewell? As coins and banknotes become increasingly rare, digital currencies such as Bitcoin and cryptos are ready to take over. In this context, the emergence of these alternatives could well redefine our way of paying.

The Decline of ATMs

Aside from the Paris 2024 Olympics, France has other worries. Indeed, ATMs experienced a particularly tough year in 2023: more than 2,000 disappeared from French towns and villages. A record decrease that hasn’t gone unnoticed by the Banque de France.

The total number of ATMs decreased from 46,249 to 44,123, a drop of 4.6%. Since 2018, more than 8,500 machines have ceased to function.

This decline is justified by the decrease in cash withdrawals, a direct consequence of new payment habits. Management costs, such as supply and maintenance, weigh heavily on the economic balance of banks.

This trend towards reduction is not isolated. Small municipalities are particularly impacted. One in six has lost its ATM in the past five years.

“ATMs are utilized at only 30% of their capacity,” laments Olivier Fournier, president of 2SF, in the columns of Le Figaro.

This under-utilization rate is pushing banks to rationalize their network, but it leaves citizens in rural areas seeking easy access to cash.

Banks’ Response: The Pooling of ATMs

Facing this erosion of access points, major French banks are reorganizing. BNP Paribas, Société Générale, and Crédit Mutuel have decided to merge their ATM networks under the brand “Cash Services.”

This initiative, aimed at reducing costs, plans for a 30% reduction in the number of sites by 2026. Thus, the number of ATMs should drop to around 7,000, mainly concentrated in major urban areas.

The pooling is not a panacea. Although this project aims to maintain cash accessibility, it raises questions about the future of less-served areas.

Banks have promised to maintain adequate access to cash, but in reality, the proposed solutions are often limited.

For small municipalities, the cost of installing and managing a non-bank ATM can be prohibitive. Loomis company relay points, although available, are not a universal solution.

Crypto: The Digital Response to the Decline of Cash

With the decreasing number of ATMs and the reduction in cash withdrawals, cryptocurrencies present themselves as a modern alternative. Bitcoin (BTC) and other cryptos offer a digital solution that doesn’t rely on traditional infrastructures such as ATMs.

Consequently, their adoption could see significant growth in this climate of cash reduction.

However, the European Central Bank (ECB) is not ready to give up without a fight. It is pushing for the introduction of the digital euro, intended to replace cash while maintaining centralized control.

This official digital currency could hinder the expansion of cryptos by favoring an alternative controlled by traditional financial institutions.

Cryptos, though innovative and decentralized, will have to navigate an increasingly complex regulatory landscape where the ECB is a key player.

Bitcoin and cryptos are being propelled as potential alternatives in the face of the decline of cash. But the ECB, with its digital euro, could slow down this transition.