Bitcoins Gaining Traction In The Black Sea

Countries in the region, collectively known as the ‘Black Sea Basin,’ have experienced growth in both bitcoin adoption, and infrastructure. There are over 13,600 locations to buy bitcoin in person in the region.

It’s not at all apparent when looking at an ATM placement map, such as Coin ATM Radar, how densely populated these areas are with shops and machines that will sell bitcoins for the local currency.

Such websites only list bitcoin-focused ATM machines, not multipurpose kiosks, nor shops where you can go to the counter and purchase bitcoins from the clerk. If you could include these kinds of shops and machines, which are every bit as good at selling bitcoins as a bitcoin ATM, then it’s clear that countries in eastern Europe have an extraordinarily high degree of bitcoin access.

Residents in the region do many everyday tasks through payment kiosks, including utility bill payment, Internet and TV service pre-payment, crediting electronic or banking accounts, paying insurance premium payment and even paying income tax.

“Bill payment kiosks provide a convenient alternative to online or at bank branch payment that is quite appealing to the unbanked population which varies by country, but usually represents a high percentage of the overall population. High availability of bill payment kiosks along with access to electronic wallets are the major contributors to the rising popularity of bill payment kiosks.”
— – Vlad Kravtsov, Maastrict School of Management

Some of the biggest payment Kiosk companies include the IBOX in the Ukraine, JSC Nova in Georgia and Zebra Pay in Romania. Striking agreements to add Bitcoin exchange applications to these kiosks, in one or both directions, has so far been an easy job for local Bitcoin entrepreneurs.

When the first BTCU Kiosks in the Ukraine started selling bitcoins in July 2014, they were proudly announcing “more than 4,900” locations across the country. Today, the company’s website claims “over 10000,” using at least two different brands of kiosk manufacturer. The website also lists a way to sell bitcoins through these machines, although it is not clear if that feature is available on all models.

In Greece there is news of 1,000 promised ATM machines rolling out soon. The service is being supplied across the country by wallet provider Cubits and Greece’s most prominent bitcoin exchange, BTCGreece. Cubits CEO Tim Rehdler’s plans to help the people and businesses in Greece to circumvent capital controls, and these ATMs are only the first step in a process designed to fully replace the ailing Greek financial infrastructure, with Bitcoin.

Also this week, we learned that the small country of Georgia, that sits on the eastern edge of the Black Sea, already has 1,500 Kiosks that sell bitcoin. According to a post by Bitcoin ATM Startup SatoshiBay, they are in service now. The number of ATMs, in such a relatively small country, makes Georgia the “highest density of Bitcoin ATMs worldwide.”

Romania also has an involved history with Bitcoin, and some of the best internet infrastructure in Europe. In October of last year, BitcoinRomania partnered with Kiosk network Zebrapay to sell bitcoin at 874 locations. Today they appear to have as many as 1,540 locations.

In Dec 2014, over 6,000 Romanian merchants briefly had the ability to accept bitcoin at their brick-and-mortar shops. A local exchange, BTCXchange, signed a deal with NetopiaMobilpay to provide the network. Just weeks later BTCXchange was hacked, and couldn’t afford to keep operating after sustaining heavy losses.

The following month, Romanian parliament member Remus Cernea announced he’ll be accepting bitcoin donations for his presidential campaign this year. A few traditional Bitcoin ATMs have been installed since, and merchant adoption has been steadily growing.

In February, Dutch bitcoin company Bit4Coin found a way to get almost 300 retail locations across Turkey selling bitcoins using a voucher card system called the Bitupcard.  Early results were very promising, according to Bit4Coin, and they have plans to expand to more locations.

Falling behind in new bitcoin infrastructure is Bulgaria, which has only attracted a couple of ATMs so far. However, local regulators have stated that digital currencies will be taxed at a flat 10% rate for both people and corporations, the same as regular income.

Bitcoin merchant adoption in the region is moving from the more concentrated Europe, eastward over the basin. Coinmap may be a good indicator of merchant concentration levels, but their websites exist in English only. The less English that is spoken in a country, the fewer of its’ merchants would likely find the website to list their businesses on.

The region has many positive indicators for bitcoin, besides the high commerce activity between the member countries mentioned above. According to the European Neighbourhood Instrument Cross-Border Cooperation, Black Sea Basin 2014-2020 Report, Remittances are also at high levels.

“The significant emigration since the 1990s, mostly labour emigration, has generated considerable flows of remittances to the Black Sea region […] Personnal remittances received represent a substantial part of Gross Domestic Product (GDP) for Moldova (23%), Armenia (20%) and Georgia (11%), and is at about the same level as foreign direct investment (FDI) overall for Ukraine.”
— – Black Sea Basin 2014-2020 Report

The population in the region is also highly educated, with a large number of universities and research centers in the area.

“The Black Sea Basin is characterized by the high level of education of its workforce overall and increasing youth enrollment in higher education on average, ranging from 19% in Azerbaijan to 89% in Greece.”
— – Black Sea Basin 2014-2020 Report

Internet and mobile phone access is just below that of central Europe, increasing “more than 200% since 2005 in all countries of the Black Sea region,” according to the report.

Countries in the region also are extremely active trading partners, with dozens of international trade routes between them for shipping all types of goods. Imports and exports to other Black Sea Basin members make up a collective 85% of the member countries’ GDPs.

“The total cargo turnover for the ports of Bulgaria, Georgia, Russia, Romania and Ukraine between 2000 and 2007 increased more than twice and around 50,000 ships sail through the Bosporus every year including at least 10,000 oil tankers.”
— – Black Sea Basin 2014-2020 Report

Spartan Route, which was created to help Greece avoid the local capital control situation, makes using bitcoin a part of such international trades. The purchaser pays Spartan Route in Bitcoin, and Spartan Route makes the payment to the supplier, taking care of everything else. “There is no payment to large or too small,” states the company.

If such a service becomes popular on the Black Sea, such enormous volumes of trade moving through bitcoin would likely make it a mainstay in the region.