Soon get your cryp­tocur­rency at nearby ATM kiosk

Uno­coin sets up its first kiosk where bit­coins, other vir­tual cur­ren­cies can be traded us­ing cash

Business Standard - - STOCKS - VIRESHWAR TO­MAR

Even as the le­gal un­cer­tainty on crypto cur­ren­cies looms in In­dia, crypto cur­rency ex­change Uno­coin has launched its first ATM in Bengaluru. Through this ATM, traders can de­posit phys­i­cal cash (in ru­pees) in their crypto wal­let and can trade in bit­coin and other cryp­tocur­ren­cies.

If a trader wants to get some cash, he just needs to sell his crypto cur­ren­cies on the Uno­coin plat­form, and he would be able to with­draw the money from this ATM. Uno­coin has found this work­around af­ter the Re­serve Bank of In­dia (RBI) in April banned banks and all en­ti­ties it reg­u­lates from deal­ing with or pro­vid­ing ser­vices to any in­di­vid­ual or busi­ness en­ti­ties deal­ing with or set­tling vir­tual cur­ren­cies. By set­ting up an ATM that ac­cepts and dis­penses cash, Uno­coin has cir­cum­vented the RBI rule.

Uno­coin said, “Owing to the RBI’s re­cent no­ti­fi­ca­tion on ‘pro­hi­bi­tion on deal­ing in vir­tual cur­ren­cies’, our bank­ing re­la­tion­ships were dis­rupted some time ago. Since then, we were in the process of de­ploy­ing new mech­a­nisms for ru­pees de­posits and with­drawals. Now we are here with the im­ple­men­ta­tion of kiosk.”

“Our ATMs are ca­pa­ble on ac­cept­ing and dis­pens­ing the cash. Through Uno­coin ATM, traders can de­posit ru­pees within some lim­its. At the same time, they can with­draw their money,” Sathvik Vish­wanath, Co-founder and CEO of Uno­coin told Busi­ness Stan­dard. He said the ATM was func­tional and avail­able for trad­ing crypto cur­ren­cies.

How it works

“We are in­stalling the same ATM that banks use. We just mod­ify its soft­ware to con­nect it with our server to re­flect the trans­ac­tion,” said Vish­wanath.

To de­posit ru­pees into the crypto ac­count, a user would log in to the Uno­coin ac­count on the ATM, con­firm ac­count de­tails and de­posit the money into the ATM. The Uno­coin ac­count is up­dated in­stantly, and can be used to buy any cryp­tocur­rency.

The user can also with­draw the money that he ob­tains by sell­ing crypto as­sets. For with­drawal, users will have to make a re­quest by vis­it­ing the ex­change web­site or mo­bile app, where the de­sired with­drawal amount is spec­i­fied. The 12-digit ref­er­ence num­ber from ex­change is sent to the user. The user would then visit the Uno­coin ATM to en­ter the ref­er­ence num­ber and OTP

Le­gal va­lid­ity

to with­draw the money. Uno­coin has said min­i­mum amount for de­posit and with­drawal is ~1,000 and must be in mul­ti­ples of ~500. Users are sub­ject to some lim­its on de­posit and with­drawals per trans­ac­tion and per-day sub­ject to cash han­dling re­stric­tions in In­dia. These are still early days and Uno­coin will need to find the right amount of cash in the ATM. If there is less de­posit and more with­drawal, “it will come to a sit­u­a­tion where cash is not avail­able in the ATM,” said Vish­wanath. “In the other case, when de­posits are too many and with­drawals are less, we are plan­ning to hire a cash man­age­ment ser­vice or agency,” he added. Ac­cord­ing to the RBI direc­tions, banks and other fi­nan­cial en­ti­ties can­not pro­vide any ser­vice to cryp­tocur­rency deal­ers or traders. Kashif Raja, co­founder of Crypto Kanoon, a blockchain and cryp­tocur­rency le­gal ad­vi­sory plat­form, said re­cent step taken by Uno­coin seemed to be le­gal but “we have to wait and watch”.

“As a reg­u­la­tor, RBI di­rects banks and other en­ti­ties to stop ser­vices with per­sons or agen­cies, who are deal­ing with crypto as­sets. Uno­coin is not us­ing any bank­ing chan­nel for this process,” said Raja. He said, by law, a per­son can trans­act in cash as long as it is un­der ~200,000 and Uno­coin too can­not ex­ceed this limit, else le­gal ac­tion can be taken against the ex­change.

How­ever, if there are more de­posits than with­drawals, the ex­change would need to de­posit the cash in a bank ac­count and then the bank can ask the source of the de­posited money. Vish­wanath said owing to less liq­uid­ity in crypto mar­ket, such a sit­u­a­tion was pos­si­ble. “We are work­ing on it,” he said. Post RBI ban, many ex­changes are work­ing on other so­lu­tions. Some ex­changes have also started peer to peer trad­ing on their plat­forms. Uno­coin is also plan­ning to in­stall these ATM in Delhi and Mum­bai in cou­ple of weeks.

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