A new ATM in Bengaluru’s Kemp Fort Mall has become the latest face of the stand-off between India’s crypto-community and its banking regulator.
The cryptocurrency ATM, India’s first, was launched by the virtual currency exchange Unocoin on Oct. 14. Meant exclusively for Unocoin customers, this ATM can be used to deposit or withdraw money, which can then be used to buy cryptocurrencies from Unocoin’s website or mobile app.
This week, the exchange plans to put up one such ATM machine each in Mumbai and New Delhi.
The introduction of virtual currency ATMs comes amidst turbulence in the country’s cryptocurrency ecosystem, involving legal battles, low volumes, and tighter regulations. For Unocoin, however, these machines are a way to circumvent the Reserve Bank of India’s (RBI) crackdown. It says its ATMs have nothing to do with India’s banking system and, hence, do not violate any RBI norms.
In July, the RBI had stopped lenders from maintaining any business relationship with virtual currency exchanges and traders. Consequently, business at crypto exchanges has taken a severe beating.
“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 (bitcoin and its elk) are unable to withdraw their money,” Sathvik Vishwanath, co-founder and CEO of Unocoin, told Quartz.
Since July, the bourses had shifted to peer-to-peer and crypto-to-crypto trade to do away with currency deposits or withdrawals for digital currency transactions on the exchanges. However, business has not been the same. “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.