The two firms plan to develop technology that will allow bitcoin users to deposit and withdraw Bitcoin from Stargroup’s 500 ATMs in Australia.

Fintech firm Stargroup has signed a joint-venture agreement with fellow Australian Securities Exchange (ASX)-listed company Digital X to provide a “two-way” ATM solution for buying and selling bitcoin.

According to Stargroup, there are currently only 20 ATMs in the country that can facilitate Bitcoin transactions; however, conversion fees are in the range of 4 to 8 percent of the transaction value. Additionally, the vast majority are “one-way” ATMs, which means users can only purchase Bitcoin and add it to their Bitcoin wallet.

Two-way ATMs will allow users to both acquire Bitcoin and instantly convert their bitcoin into Australian dollars so they can withdraw cash from the ATM, the companies explained.

Under the agreement, Stargroup will be developing the ATM software to process the two-way transaction, while Digital X will be charged with developing an API to facilitate the transactions. The Perth-based companies will share the transaction fees charged at the ATM.

According to a statement released to the ASX on Monday, the process for Bitcoin users looking to cash out their money can currently take a number of days using online digital currency exchanges.

Stargroup operates approximately 500 ATMs in Australia and manages another 2,400 ATMs via its wholly owned subsidiary StarLink. As Digital X has developed a secure ledger system based on blockchain technology, the two companies expect to roll out the two-way ATM offering across Stargroup’s entire Australian remit.

Stargroup also has a direct ownership interest in NeoICP Korea Inc, a private South Korean company that manufactures ATMs, back-office, coin counting, banking, and casino settlement solutions. NeoICP Korea has approximately 16,000 ATMs and back-office machines in South Korea.

In June, Melbourne-based Blockchain Global made a AU$4.35 million investment in Digital X, paying AU$300,000 of the total by way of a convertible loan in Bitcoin. The investment sees Blockchain Global hold a 40 percent stake — approximately 1.6 million shares — in Digital X.

Blockchain Global scooped up Digital X’s Digital X Direct liquidity desk customers in February, onboarding them onto its own Bitcoin exchange platform, ACX.io.

ACX.io was touted at the time by Blockchain Global’s CEO Sam Lee as Australia’s largest bitcoin exchange by volume and order book, claiming 60 percent of the bitcoin market trade volume in the country.

As part of the deal, Blockchain Global took over the management of Digital X Direct’s clients, leaving Digital X to reap 50 percent of the revenue over a five-year term from new customers introduced to the ACX.io exchange as a result.

For the three months ended March 31, 2017, Digital X said it generated revenues of approximately AU$11,000 related to Blockchain Global’s referral fees, and AU$2,000 from foreign exchange fees.

Digital X became listed on the ASX after performing a reverse takeover of investment firm Macro Energy three years ago. Digital X only emerged in October 2015 after DigitalBTC — trading as Digital CC — underwent a name change and shift in business model.

After rebranding, Digital X announced its focus would be on its app-based cash remittance product AirPocket, saying at the time that the new name and direction represented a strategic change from a focus on Bitcoin as a mechanism in order to store value, to a focus on software development.

In April, Digital X entered into a partnership with fellow Perth-based software development firm Lateral Pty Ltd to create blockchain and distributed ledger-based products for large enterprises across Australia and several targeted regions in Asia.

For the first half of the 2017 financial year, Digital X posted an operating loss of $1.06 million, taking a $591,000 hit in the second quarter.

Stargroup reported a statutory loss of AU$1.5 million for the six months to December 31, 2016, on revenue of AU$4 million.

via ZDnet

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