Crypto Exchange Unocoin Launches Its First Cryptocurrency ATM In India
Unocoin, the oldest crypto exchange, and blockchain company in India, officially launched its first cryptocurrency ATM in Bengaluru’s Kemp Fort Mall on October 14, 2018. The decision to open the ATM is to circumvent the ban imposed by India’s central bank, the Reserve Bank of India (RBI), that prevents the banks from doing any transaction involving cryptocurrencies.
The ATMs installed by Unocoin does not require any banking partnerships and are stand-alone machines that can accept and dispense cash.
“We at Unocoin have always believed in serving our customers with the best of their interest and with the most secure services. Since December 2013, our team has been serving the Indian bitcoin and blockchain community by continuously innovating and making ways for a smoother and wider experience,” the company said in a post on its official website.
The company has plans to expand the network by opening more ATMs in Mumbai and Delhi in a couple of weeks.
Sathvik Vishwanath, co-founder, and CEO of Unocoin, revealed to news.Bitcoin.com on Sunday: “The 1st ATM will be operational in Bangalore tomorrow. In the first phase we plan to deploy 30 machines, the first one is in Bangalore followed by Mumbai and New Delhi in the upcoming week.”
The ATM is meant exclusively for Unocoin and Unodax (crypto-to-crypto trading platform) customers, who can use it to deposit or withdraw Indian currency from the ATM. This can later be used by customers to buy cryptocurrencies (such as Bitcoin, Ethereum, or other crypto coins) from Unocoin’s website or mobile app.
In accordance with RBI ATM rules, the company has imposed daily limits transactions. The company’s post explains, “Users are subject to some limits on deposit and withdrawals per transaction and per day subject to cash handling restrictions in India. The minimum amount for deposit and withdraw is 1000 INR and must be in multiples of 500 INR.”
Vishwanath emphasized, “All coins on Unocoin and Unodax can be bought using the money deposited through ATM machines. We presently have 30 coins that can be bought.”
Solution to RBI Crypto Banking Ban
In April this year, RBI had issued a circular that bans financial institutions under its control from providing services to crypto businesses. The ban went into effect in July that saw all crypto exchanges in India lose their ability to provide rupee deposit and withdrawal services. The biggest example is Zebpay, the largest Indian crypto exchange, who had to recently close their cryptocurrency exchange due to banking problems.
“The RBI has imposed a ban on banks, regarding money-related transactions, so our customers are not able to buy easily or the ones who have it (bitcoins) are unable to withdraw their money,” Sathvik Vishwanath, co-founder and CEO of Unocoin, told Quartz.
“Therefore, we have come up with this solution to fill the gap caused by the central bank’s ban because right now cash-in and cash-out facility is not available,” Vishwanath said.
How does the ATM work?
The company’s post explains the process that customers need to follow to deposit and withdraw INR and carry out their trades.
“To deposit INR into his Unocoin/Unodax account, a user would reach to a Kiosk and enter his User ID and the OTP that he just received as SMS on his registered mobile number. The user would then confirm his account details and deposit the funds into the Kiosk machine. Instantly his Unocoin account will be updated with the deposited funds that he can use on Unocoin to buy BTC or ETH, or he can use it on Unodax to place BID orders on 30 various crypto assets.
“The user can withdraw the deposit INR before or can withdraw INR that he obtained by selling crypto assets on Unocoin or Unodax platforms. To withdraw INR, users have to make a request by visiting Unocoin.com or through Unocoin mobile app where he would specify the desired amount for withdrawal. The 12 digit reference number from Unocoin is sent to the user. The user would then visit the Unocoin Kiosk to enter the reference number and OTP that was sent to his registered mobile number to withdraw the INR to his hands,” the post explains.
Unocoin maintains that its machines do not violate RBI norms, which only prohibit non-banking entities from setting up ATMs for banking operations. “Our ATMs do not need banking network or relationship to work. They just work as the cash deposit and dispensing alternative for Unocoin customers,” said Vishwanath.
While the gap has been completely filled by these ATMs, the only inconvenience would be that customers will have to access a crypto ATM to complete these transactions physically.
Unocoin is looking to target malls and other locations in India that have higher footfalls, to set up more ATMs. “At present, the volume (of transactions) has become one-tenth of what it used to be (before the RBI crackdown). We believe that after we have deployed it in many other cities and it becomes popular then demand should come back,” said Vishwanath.