Can crypto benefit from this?

Cash, that faithful companion of daily transactions, seems to be slowly crumbling in France and Europe. Will physical money say goodbye with the mass closure of ATMs? As coins and banknotes become increasingly rare, digital currencies such as Bitcoin and cryptos are poised to take over. In this context, the rise of these alternatives could redefine our way of paying.

The decline of ATMs

In addition to the Paris 2024 Olympic Games, France has other concerns. ATMs have indeed a particularly difficult year in 2023: more than 2,000 disappeared from French cities and towns. A record drop that has not gone unnoticed by the Banque de France.

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

This decline is justified by the decrease in cash withdrawalsa direct consequence of new payment habitsManagement costs, such as delivery and maintenance, weigh heavily on the economic equilibrium of banks.

This trend towards reduction is not unique. Small municipalities are particularly affected. One in six has lost their ATM in the past five years.

“ATMs are are only used at 30% of their capacitycomplains Olivier Fournier, president of 2SF, in the columns of Le Figaro.

This underutilization rate forces banks to rationalize their networkbut it makes rural citizens look for easy access to money.

Banks’ response: bundling ATMs

Given 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, provides for: a 30% reduction in the number of locations by 2026The number of ATMs should therefore fall to around 7,000, mainly concentrated in large urban areas.

The Merging is not a panacea. While this project aims to maintain cash accessibility, it raises questions about the future of underserved areas.

Banks have promised maintain sufficient access to cashbut in reality the proposed solutions are often limited.

For small communities, the cost of installing and operating a non-bank ATM can be prohibitive. Loomis business relay points, while available, are not a one-size-fits-all solution.

Crypto: The Digital Answer to the Decline of Cash

With the decreasing number of ATMs and the decrease in the number of cash withdrawals, cryptocurrencies present themselves as a modern alternative. Bitcoin (BTC) and other cryptos offer a digital solution that is not dependent on traditional infrastructures such as ATMs.

Therefore, in this climate of wasting money, its acceptance could increase significantly.

However, the European Central Bank (ECB) is not prepared to give up without a fight. It is urging the Introduction of the digital eurointended to replace cash, but still maintain central control.

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

While cryptocurrencies are innovative and decentralised, they must navigate an increasingly complex regulatory landscape in which the ECB plays an important role.

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

Michaja A.

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The views, thoughts and opinions expressed in this article are solely those of the author and should not be construed as investment advice. Please conduct your own research before making any investment decisions.