A Modern Solution to an Old Problem

VeradiVerdict - Issue #83

When I first entered the blockchain space in 2014, the two use-cases I saw were cryptocurrencies as a store of value and as a way to send remittances across borders. We are seeing Bitcoin continue to be a store of value and asset diversification during these hard times. For remittances, cryptocurrencies have proven to be a great way to move value across borders faster, cheaper, and more transparently than using fiat money (non-crypto services like banks). See the chart that Pantera created from some of its cross-border portfolio companies during the last 6 months.

While we hope that paper money eventually becomes fully digital, it’s not going to happen anytime soon. We are still transitioning to an ideal digital world as cash is very prevalent in the emerging markets. Thus, there needs to be a solution that will bridge fiat money into digital money, then back to fiat money, while using cryptocurrencies as a faster, cheaper rail for value transfer.

Today, I am excited to announced that Pantera is leading the $10m Series A round into Coinme, a company that is making remittances more cost-effective and providing an on-ramp for use-cases such as decentralized finance.

  • Coinme is a worldwide network for buying Bitcoin via local onramps. The ethos of the product is to help bring more mainstream users into cryptocurrency and decentralized finance by providing them accessible, easy-to-use mechanisms to exchange fiat for digital assets and do actionable things with those assets.

  • The product boils down to three key components:

    • Physical Onramps: Coinme has partnered with Coinstar (which makes the machines in grocery stores that can convert loose change into cash) to set up over thousands of Coinstar machines with Coinme services. This allows users to go to grocery stores with Coinme-powered Coinstar machines, insert fiat (paper bills, not loose change), and redeem cryptocurrency quickly and easily. The service is currently available in over 3,500 locations across 27 states, with the coverage expected to expand to thousands of additional locations in all 50 states.

    • API for ATM Integration: Coinme has built an all-inclusive API that can integrate with any existing ATM to integrate Coinme’s exchange services into the ATM. As Coinme grows operations both domestically and internationally, being able to scale simply by plugging this into ATMs will help onboard even more users and create a simpler experience.

    • Private Client Advisors: For some users, Coinme even offers personalized support to help individuals understand the value of cryptocurrency as an alternative asset and subsequently facilitate trades for them. 

    • Beyond helping onboard users into crypto, Coinme is also developing a new process for sending remittances. Most remittance services today have high transaction fees, huge delays in receiving payments due to cross-border issues, and limited access due to small, restricted payment networks. Coinme allows users to send money simply by exchanging fiat for crypto and sending that crypto to other users’ Coinme accounts on their phones or select in-person cash pickup locations, where users can re-exchange the crypto for cash. 

    • This makes the remittance process effectively borderless, since it increases transaction speeds, and is much more accessible, since it can be performed from any mobile device. Coinme’s transaction fees are also significantly less than other remittance services.

    • Ultimately, Coinme presents a promising solution to the problem of bringing more users into crypto and DeFi, and gives them a clear reason to exchange fiat for digital assets, in hopes for cheaper, faster, and more accessible payments. 

Boosting Mainstream Interest in Crypto

One of crypto’s trickiest problems is getting people on board. Since its inception, the space has been saturated with technologists and cryptoeconomists who tout radical applications of electronic stores of value, while the vast majority of the general public continues with their typical consumer banks and credit cards based in fiat. Bringing mainstream users into the space and making crypto a part of day-to-day life is a key challenge in increasing the awareness, effectiveness, and reach of crypto applications like decentralized finance. Ultimately, the industry is in huge need of creative, effective measures to start getting ‘main-street’ users to convert their cash into Bitcoin.

Meet Coinme

Coinme is a network for buying Bitcoin with cash via local fiat onramps.

The intuition behind Coinme is simple. If you’ve ever taken a bag of coins that’s been sitting around in your home to the grocery store to get it exchanged for cash or a bank deposit, you’ve probably heard of Coinstar, the company that builds the machines that perform the coin-to-cash conversion. 

Coinme, which has deployed their exchange technology onto Coinstar kiosks, has a similar MO. Everyday people have fiat that they’re currently not using –– whether that be lodged under their couch cushions or in their wallet. Coinme enables people to exchange their fiat for Bitcoin, simply by going to a grocery store and inserting cash at a Coinme-powered kiosk, or ATM. The ultimate goal is to improve widespread access to cryptocurrency, and enable mainstream users and customers to invest in crypto, even make money off of hodling, and explore DeFi as an alternative to their traditional financial operations. Once they buy Bitcoin, they become a digital customer of Coinme’s wallet. Coinme is literally providing the onramp to a digital, decentralized, future.

How does it work?

Users visit Google Maps or Coinme.com to find a location. Soon Coinme will have a kiosk located within 5 miles for the majority of the American population given Coinstar’s market saturation in grocery stores and pharmacies (find your nearest kiosk here). Users visit the location, find the Coinstar kiosk, click buy bitcoin and then insert cash into the kiosk; once completed, the system prints out a voucher and directs the user to visit Coinme.com to redeem their Bitcoin. They then can check out Coinme’s Redeem Page where they upload information from their voucher and go through a quick, simple know-your-customer (KYC) check. They finally have access to digital assets, which was fiat cash laying around just minutes ago, most likely going down in purchasing power. 

The entire process is made to be as seamless and intuitive as possible –– it’s made to be an add-on errand that can be done while purchasing groceries, and finding a kiosk is as simple as typing “bitcoin near me” into Google Search.

Propagating More Growth

Formally, Coinme’s product comes down to three things:

First, the physical on-ramp process, which is where customers go to a Coinstar kiosk that’s been set up with Coinme. Through the Coinstar partnership, Coinme has over 3,500 kiosks across America where people currently go to exchange fiat for Bitcoin –– a number that’s only expected to grow in the near future.

Second, the API. Coinme has built an all-inclusive API that works with any ATM machine to enable users to convert cash to crypto or crypto to cash using Coinme’s backend services. This helps drive Coinme’s tandem growth via partnerships with ATMs, banks, etc.. The hope is that widespread integration of the API into most ATMs will make the fiat onramp even simpler for mainstream consumers –– just as easy as depositing or withdrawing cash from your checking account.

Third, private client services. Coinme offers personalized education about crypto, Bitcoin, and DeFi for interested users before and/or after they exchange their fiat for digital assets. This isn’t as core to their en-masse onboarding product, but it is a useful mechanism for ensuring that users grow their interest and uses of crypto even further after making their initial fiat-to-crypto exchange. 

As of April 2020, the network has reached an average daily transaction volume that is 65% higher than January 2020. This indicates the network is significantly growing even in spite of global economic turmoil and the ongoing pandemic. Fundamentally, this means their physical onramps are accomplishing their goal of helping bring more mainstream users into cryptocurrency –– something that will hopefully only accelerate with their ATM API in the future. 

Remittances, a Key Use Case

Admittedly, there are tons of options for users to convert fiat into cryptocurrency. What’s unique about Coinme’s approach, aside from being the largest cash onramp in the U.S.?

Remittances are payments that individuals send to loved ones in other countries to help pay for some of their expenses. Remittances are notoriously difficult –– they involve outdated financial services, cross-border payment issues creating delays in payments, and high transaction fees, creating a difficult experience for payers and receivers alike. Additionally, most remittance services have limited networks, meaning that users have to pay/receive money at specific access points, adding even more friction to the experience. In spite of this, remittances are one of the largest sectors of finance globally; even capturing 1% of the space is a $2 billion market cap. 

Coinme offers a simple, effective solution for users hoping to send remittances immediately to their loved ones. Once they’ve exchanged fiat for Bitcoin, users can now transfer funds (via Bitcoin) to their loved ones’ Coinme accounts, which they can redeem for cash, or at select in-person locations where receivers can physically pick up cash transferred via Bitcoin. Since the Coinme network is P2P, it’s effectively borderless, meaning that remittances don’t run into the same international issues that they would with more established, legacy methods and that payments can be processed immediately, not after weeks. It also democratizes access to payments, since instead of interacting with select access points, payers and receivers can perform the entire process from the comfort of their own phone. Moreover, it significantly brings down transaction costs; for a $200 remittance, the average cost is 7%, significantly higher than Coinme’s flat transaction fee of 4%. Particularly as Coinme expands operations around Mexico and Brazil, the hope is that it simplifies the remittance process for payments made across the United States-Latin American borders.

Final Thoughts

Coinme presents a promising fiat onramp to give mainstream users access to crypto and the necessary tools for them to be excited about DeFi. The experience is as simple as going to the grocery store or nearest ATM; the novelty of being able to trade cash for Bitcoin immediately is likely already enough to get some customers finding the nearest Coinstar kiosk that supports Coinme. 

Beyond the exchange mechanism, Coinme also services a clear use case for digital assets redeemed via its platform. It’s a new approach to remittances that significantly undercuts payment times, nearly halves transaction fees, and creates a much simpler, seamless process for sending funds to loved ones.

Coinme has already achieved considerable success in bringing in users and driving conversion between fiat and Bitcoin. Its growth in the near term will be critical in mainstreaming crypto and DeFi even further and improving cryptocurrency-based remittances further. 


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Walks and jogs at the park, 6 feet apart, wearing masks

Zoom coffee meetings


Hi, I’m Paul Veradittakit, a Partner at Pantera Capital, one of the oldest and largest institutional investors focused on investing in blockchain companies and cryptocurrencies. The firm invests in equity, pre-sales/IEO rounds, and cryptocurrencies on the secondary markets. I focus on early-stage investments and share my thoughts on what’s going on in the industry in this weekly newsletter.

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