Iowa lawmakers have passed a new law that sets hard limits on crypto ATM usage, which caps the daily transactions to $1,000 and charges no more than a 15% fee on every transaction. The law has stirred some support and praise among small-town leaders and consumer advocates, but it has pushed crypto users to look for alternative methods of spending, transacting, earning, converting, and storing the digital currencies.
Iowa residents across the state have already begun adjusting, with some purchasing gift cards on crypto marketplaces while others use peer-to-peer apps that aren’t overseen by traditional or local institutions. Some residents in Mason City are sending their crypto assets to friends in other states, enabling them to draw larger amounts and avoid the limitations.
Some use the best crypto casinos to spend their digital assets. Industry expert Hira Ahmed says these casinos empower crypto owners to deposit their assets without limits, play their favorite casino games online, and withdraw funds at lightning speeds with lower transaction fees. These platforms provide provably safe gaming and crypto usage using smart contracts and Layer 2 solutions that reduce gas fees. The workarounds aren’t widespread across the state yet, but locals are looking for other ways to access or use their digital assets.
The new law was backed by a bipartisan group in Des Moines and signed in May. It came after concerns about the operations behind crypto ATMs because they don’t require full identification, and some have fees as high as 23%. Iowa legislators claimed to act out of concern for fraud victims, elderly residents, and first-time users who didn’t know how high the fees could be or those who lacked the support after sending assets to unknown wallets.
Iowa has joined a small but notably growing number of states that have attempted to regulate the crypto ATM industry. Bill supporters claim that the limits are a fair compromise that enables continued access while protecting locals from high fees and potential scammers who want them to send large crypto sums to unknown wallets.
Those who support the bill also say that most residents who use crypto for everyday needs won’t be impacted, including sending small digital gifts or buying stuff online. There are currently over 300 crypto ATMs operating in Iowa, with new machines popping up at malls, gas stations, and grocery stores.
The new law won’t ban these machines or reduce their numbers. Instead, it will make sure operators register with the state of Iowa and follow clearly defined rules. The proposed rules include clearly disclosing fees before transitions and identifying users moving crypto over a certain threshold. State officials claim that these rules are common sense, particularly with the rising number of crypto ATM scam reports.
Officials in North Iowa have also watched the situation closely, with law enforcement in Cerro Gordo County responding to multiple calls from residents who lost money through crypto ATM scams over the last year. North Iowans believed they were paying fines or utility bills. Instead, they sent money to overseas con artists. The new caps will simply improve the safety of crypto ATMs to make sure they match security measures and protocols used by various other online and physical platforms that accept crypto.
For example, Mason City businesses accepting crypto claim they aren’t worried. They already saw the decline of crypto ATM usage because of the high fees and greater accessibility to online exchanges. The bill may actually encourage locals to use secure wallets and pay with crypto at retail outlets to avoid the involvement of third-party machines. One electronics store owner believes that the bill may bring them more business.
In truth, the new law published in the Iowa Legislature BillBook only aims to protect consumers, not destroy the use of crypto through safer platforms and in local stores. Local businesses and crypto owners shouldn’t worry about the changes that are intended to protect them. Some confusion remains in rural areas, specifically about what the bill would change. Some rural residents believed crypto was banned, while others didn’t even know they could use the kiosks or ATMs.
Iowa officials have, fortunately, promised to carry out an outreach program in the next few months to make sure the new rules are explained and highlight alternatives to buy, sell, and spend crypto safely. They aim to eliminate confusion through regulation and education.
Of course, crypto ATM providers are concerned, warning that these rules could drive them out of state. Some have even threatened to take the machines away entirely or limit service hours. Others are confirming that they will comply with Iowa regulators by adjusting their fees and software structures, while some have requested a grace period to make these improvements, particularly those that have machines in smaller towns.
The law stands for now, and crypto users throughout North Iowa will adapt. Most won’t dare to give up on their digital assets because there are many ways to spend, trade, and convert them beyond the ATMs. Crypto users will continue finding smarter ways to use their assets. One Charles City resident who has owned and used crypto for years claims that he will simply turn to online methods. Besides, he won’t have to drive to an ATM anymore.