By Prarthana Mitra
In a historic first, India gets it first cryptocurrency ATM, courtesy Unocoin, which launched the first of many kiosks in Bengaluru, Karnataka. In a statement to the press, the digital currency exchange service said this move was a direct result of RBI’s ban on trading in cryptocurrencies earlier this year.
What lies behind the move?
In July, the RBI implemented a virtual ban on the commercial exchange of cryptocurrencies. By the time the central bank asked all financial institutions to terminate any relationship with all companies dealing in cryptocurrencies, the Indian government had already ruled cryptocurrencies out as a legal tender.
The decision to launch the Bitcoin ATM takes after this regulatory move, with took effect from July 6. Due to the RBIs recent notification on Prohibition on Dealing in Virtual Currencies, our banking relationships were disrupted some time ago, Unocoin told the press. To cushion the blow and ensure India does not fall behind in the crypto revolution, the country’s first Bitcoin ATM will allow customers to deposit and withdraw the rupee from its kiosk.
Here’s how it will work
The customers would be able to deposit and withdraw cash from the kiosk but only with designated riders. The machines are not equipped to accept debit or credit cards, as banks cannot be involved in the transaction. The minimum amount for deposit and withdrawal has been affixed at Rs 1,000, only in multiples of Rs 500 bank notes.
Many developing nations have similar kiosks, although Unocoin’s initiative is the first of its kind in India. Spokespersons have announced that blueprints for similar setups in Delhi and Mumbai are in the offing.
Recently, Argentina installed 30 Bitcoin ATMs following a spike in demand for cryptocurrency and a concurrent devaluation of the peso against the US dollar. Cryptocurrencies are not backed by Argentina’s central bank or the government, just like in India. Moreover, the Indian Rupee has been steadily falling over the last two months, which makes for impeccable timing, as far as Unocoin’s launch is concerned.
Cryptocurrencies have surged in popularity over the past year, especially after Bitcoin made an enormous jump from $5,000 to $20,000 in just two months. A lot of countries, unable to digest such a massive disruption in financial machinery, declared it illegal at the time. Unocoin is attempting to help cryptocurrency stage a return to the national conversation with the help of ATM kiosks across India, where supplanting traditional financial services can become quite difficult.
Prarthana Mitra is a staff writer at Qrius