Despite Indian Crypto Regulations and Bans, Unocoin Exchange Pushes Forward
Clampdown on Crypto in India Births Alternative
Cryptocurrency startup, Unocoin, has taken measures to continue to operate in India despite a clampdown on cryptocurrency trading by authorities in the country.
Unocoin’s alternative is stablecoins and ATMs to continue receiving fiat deposits from customers. The company set up an ATM in a Bangalore mall where customers can deposit rupees to their exchange accounts without a bank or credit card. In the coming weeks, Unocoin will open a few more ATMs in Mumbai and Delhi
Unocoin co-founder Sunny Ray said the company hasn't been able to transact through regular banking channels with its 1.3 million customers for several months, after the Reserve Bank of India (RBI) banned banks from working with crypto or crypto companies.
And now they are essentially employing bank-grade ATM machines, Ray said.
Early Adoption Sparks Hope
Some Unocoin users are quickly transferring their rupees to the ethereum-based TrueUSD token, which Unocoin began supporting in August, then using it to purchase bitcoin or other assets down the line when the price feels right.
As a so-called stablecoin, TrueUSD is designed to maintain parity with the U.S. dollar.
For customers outside Bangalore, support for stablecoins may provide an indirect way to add or hold value in their Unocoin accounts without quite as much volatility. However, that transaction volume is still less than a few thousand TUSD per day.
“We never even considered that [stablecoins] before,” Ray said. “That's more just like a stop-gap solution. It's not like an actual, final solution to everything.”
Ray said the team plans to also expand to Malta and Canada, in case operating in India becomes impossible altogether, all while exploring the options for listing several new stablecoins.
Unocoin is not the only business by the ban and ongoing legal battle to overturn or alter this ban hasn't yielded any results to date. Meanwhile, the ban is having a disastrous impact on India's crypto community, with the popular exchange startup Zebpay abruptly shutting down late last month.
As Kashif Raza, a co-founder of Crypto Kanoon, an Indian regulatory news startup, said:
“The crypto community is suffering from this ban as there have been instances where the bank accounts of individuals have been closed who were found to be dealing in cryptocurrencies.”
The crackdown has been so severe that Raza said it has created a misconception in India that bitcoin itself is outlawed, even though the ban only applies to entities governed by RBI.