ECCB warns citizens that new Bitcoin ATM machine is not authorized

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The Eastern Caribbean Central Bank (ECCB) and the Financial Services Regulatory Commission of St Kitts and Nevis (FSRC) have warned citizens that a Bitcoin ATM recently set up in the twin-island federation has not been authorized by local or regional regulators and people who use it do so at their own risk.

In a statement issued on Thursday, the ECCB said it had been brought to the attention of the Bank and the FSRC, that the ATM was “installed at a location” in St Kitts and Nevis and there are plans for the installation of similar machines in other areas.

Bitcoin founder Roger Ver at the unveiling of the first Bitcoin ATM machine in St Kitts last month.

The machine was set up at the “The Mill” Cafe at the Oceans Edge Development in Frigate Bay, late last month.

“The public is hereby cautioned that the operation of Bitcoin ATMs or any other sort of cryptocurrency operations is not currently regulated by the ECCB, the FSRC St Kitts and Nevis or by any regulatory authority in the Eastern Caribbean Currency Union (ECCU). In addition, Bitcoin or any issuer of Bitcoin has not been designated under the Payment System Act in St Kitts and Nevis,” the ECCB said.

“This means that there are no existing regulations to specifically protect consumers from financial losses if an organization that exchanges or holds virtual currencies fails or goes out of business. In other words, persons who choose to use these services or are contemplating use of these services ought to understand that they do so completely at their own risk. The extent of this risk, at this point in time, is not fully known given the novelty of the area and the absence of regulatory oversight.”

Exactly a month ago, the ECCB issued an advisory after recognizing developments in the FinTech space, encouraging consumers to be cautious in their use.

Although acknowledging that financial innovation is essential, the ECCB and the FSRC said the appropriate legal and regulatory framework is necessary to protect the integrity of the financial system and investors and consumers alike.

The Bank added that, at this stage, as a regional regulator it is pressing ahead with its work to advise the Governments of the ECCU on an appropriate regional framework for FinTech regulation and supervision as well as a strategy to reduce the use of cash to help boost growth and competitiveness.

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