Photo: Bloomberg
Photo: Bloomberg

Are crypto-currencies worth your while?

While the number of companies related to crypto currencies has increased to 20 from just four, usage in India is limited, and mostly only in bitcoins

The Reserve Bank of India (RBI) has mostly been silent on the regulations related to crypto-currencies such as bitcoins, other than sending out a cautionary message in 2013. But that has not restricted the use of crypto-currencies in India.

This is evident from the number of companies that have been launched in the last 3 years, allowing individuals to buy and sell crypto currencies. According to Tracxn, which provides financial information on start-ups: from four such companies in 2013, there are almost 20 in India now.

Three companies have already got funding of over $2 million. Most only focus on bitcoins. Some also transact in the other crypto-currencies. Mint Money looks at these companies and the services that they provide.

A crypto-currency is a digital currency created through encryption techniques. Bitcoin is the most famous. Some others are: litecoin, peercoin, namecoin, ether and primecoin. In India, most companies are associated with bitcoins.

Different kinds of businesses have also sprung up around bitcoins, including: exchanges, portfolio management, technology solutions, trading platforms and bitcoin mining. “Indians are using bitcoins to trade, make payments for overseas transactions and to convert into Indian currency," said Mohit Kalra, chief executive officer and founder, Coinsecure, a Delhi-based bitcoin exchange and trading platform.

Mint Money doesn’t recommend buying bitcoins, but if you want to, this is the process.

First, you need to register with the website or app where you plan to buy. We picked one of the exchanges. As part of the registration process, you will have to enter your user name, email, password and accept the terms and conditions.

You can also download an app to buy bitcoins. In the app, once you verify your mobile number, you can set a four-digit personal identification number (PIN). Next, enter your name and email. And then complete the verification process with your Personal Account Number (PAN) and bank details. Once your account is verified, you can start buying and selling.

There are transaction limits—minimum 500 and maximum 5 lakh. To pay, you have to use Net banking. You can send money using national electronic funds transfer (NEFT), real-time gross settlement (RTGS) and immediate payment service (IMPS). After you send the amount, your transaction will be verified and you will get a completion alert.

Currently, there are four bitcoin exchanges in India: Coinsecure, Zebpay, Unocoin and BTCX India. Like any other currency exchange, the value of the crypto-currency is affected by factors such as news or policy changes. Each exchange disclosed the market price on its website. For instance, on 22 September, the buy price of one bitcoin was Rs41,223 at Coinsecure, Rs42,247 at Unocoin, Rs42,117 at BTCXIndia and Rs41,472 at Zebpay. The sell price is usually lower, by Rs200-2,000. The transaction attracts a fee of 0.3-1.15% of the amount. To buy or sell a bitcoin from a website, you need to sign up with one of the companies. You also need to have a bitcoin wallet. Companies may ask you to go through a know-your-customer (KYC) process, where you need to provide PAN, mobile number and account details. You may not be able to transact using a third-party bank account.

“We align with AML (anti-money laundering) policies because of which our KYC and verification process allows our users to safely use bitcoin within set limits," said Vikram Nikkam, founder and bitcoin analyst,, an online platform to sell and buy bitcoins.

Some merchants have started accepting bitcoins as a mode of payment. “In 2013, no merchant establishment accepted bitcoins in India. Now, merchants and e-commerce portals have started accepting. You can use bitcoins for mobile recharge, to buy Flipkart vouchers, movie tickets and pay utility bills," said Rao. Utility bill payments such as mobile bill are still being processed. “We convert bitcoins into rupees on behalf of the bitcoin user and pay to the respective billers. So, we actually end up buying bitcoins and there is no partnership with the billers or e-commerce companies," said Sandeep Goenka, co-founder, Zebpay, an app-enabled bitcoin exchange. Mint, however, couldn’t independently verify this with retailers or billers.

“You can buy and sell bitcoins using bank transfers, Paytm, Paypal, direct deposit and ATMs and also through direct delivery (currently in Bengaluru only)," said Nikkam. Paytm declined to comment.

Unocoin, a bitcoin trading platform, mentions on its website that it allows transactions on MobiKwik. However, MobiKwik denied this claim. “We were in talks with Unocoin, but the partnership never went through. We don’t accept transactions using Bitcoins in our wallets," said Mrinal Sinha, chief operating officer, MobiKwik.

In tomorrow’s issue, read more about regulations, taxation and fraud in crypto-currencies.