BENGALURU: In February, when the finance ministry banned banks and regular financial institutions from being part of the bitcoin network, Indians could no longer buy and sell bitcoins, unless they had an overseas account or an overseas relative or friend who could transact on their behalf.
Now, to help users overcome this challenge, cryptocurrency exchange Unocoin has launched an ATM — or a kiosk, as the company prefers to call it — for Indians to buy and sell bitcoins. The first of these has been installed in a mall in Bengaluru.
The ATM, provided by ATM-maker NCR, is like the regular bank machine that we see, but with a few modifications. One of these is that the debit/credit card slot has been disabled, given that banks have been banned from supporting the cryptocurrency ecosystem.
Customers of Unocoin and its unit Unodax can deposit or withdraw cash between Rs 1,000 and Rs 10,000 per transaction per day, in denominations of Rs 500. The balance that a customer holds in his/her account can be used to buy other cryptocurrencies through the ATM.
Unocoin deals with the ethereum cryptocurrency, while Unodax deals with 30 other cryptocurrencies including ripple and litecoin. “We have a customer base of 13 lakh users and we are hoping that this will ease the pain points of customers after the ban,” says Sathvik Viswanath, CEO and founder, Unocoin. Before the ban, Indians could use bitcoins for multiple purposes, including to buy gift cards on Nafa.in, buy books, music CDs, games at Padma Book House, and buy bus tickets.
Today, however, Indians use it mainly when they are overseas, in countries like Japan that allows bitcoins to be used to pay for meals, flight tickets, and movie shows. They also use it to buy goods on foreign websites such as Ali Express. In India, some tech websites use it to pay freelancers for gadget reviews.
All such transactions are mediated through the crypto exchanges. Many, of course, view their bitcoins simply as an investment, hoping to encash them if and when their value rises. Despite the bank-ban in February, Unocoin founder Viswanath says his platform has seen 18% user growth since then, to 13 lakh users.
“The finance minister’s statement was very clear. He said, cryptocurrencies are not legal tender in India. He did not say illegal tender.
There’s a huge difference. It only means you bear the risk of your investment and there’s no regulation for the industry,” he says.
In his 2018-19 Budget speech, Union finance minister Arun Jaitley said, “The government does not consider cryptocurrencies legal tender or coin and will take all measures to eliminate use of these cryptoassets in financing illegitimate activities or as part of the payment system.”
Unocoin, which was founded in December 2013, said the next few kiosks will be set up in Delhi and Mumbai.
“We rebranded it as a kiosk after we realised people were mistaking it for a regular ATM and trying to withdraw money from it,” Viswanath says.