With an approximate total of 3879 crypto ATMs in countries around the world, India got it first in Bengaluru. Amid the tough regulation and financial transaction policies, the ATM has literally marked the, which will soon see a face-off with the regulators of banking operations. The company that exchanges virtual currency, plus that launched the ATM is Unocoin. The functionalities can be limitedly accessed by Unocoin customers. From deposits to withdrawals, money dispensed from the ATM will be used to access cryptocurrencies from the Unocoin website as well as their Application.
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 ilk) 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.
How does it work?
The functioning of the ATM is slightly off-track if we try and compare it with other virtual currency ATMs that are set up in countries around the world. Majority of Crypto ATMs allow a user to directly purchase a cryptocurrency but the atm established by the UnoCoin, on the other hand, can just withdraw or deposit money to the Unocoin account of the user. Later, that money can be used to purchase the cryptocurrency. The range of amount set for withdrawal & deposit is INR 1000 – INR 13000. To make the transaction, the customer will have to enter the id, and the OTP sent to the registered mobile number.