Very interesting, although considering the special properties of bitcoin that make it very atm-unfriendly (having to wait for confirmations) I think maybe it would be appropriate to think 'outside the atm-box' for a solution. Waiting 10 minutes minimum around an ATM doesn't sound like it's going to exactly catch on.
That won't be necessary. The ATM machine knows immediately that it has cash. As long as the connection between the machine and the blockchain is secure, the user goes away knowing the transaction
will go through, and the ATM owner needn't worry because he possesses the local currency. Any waiting period is irrelevant.