Cryptocurrency exchanges have recently been facing issues with their current account held with banks, as the latter were wary of Bitcoin. However, those investing and trading in other currencies can continue to use their respective bank accounts registered with exchanges. Apart from mechanisms like NEFT, RTGS and IMPS, exchanges are now promoting use of UPI as well, to facilitate payment.
Nischint Sanghavi, Head of Exchange, Zebpay says, "We have started rupee deposits via UPI (Unified Payment Interface) for all registered users of the exchange. These can be done using any UPI-supported app such as Google Tez and PayTM. While UPI was available earlier as well, it has now been seamlessly integrated with our app now. We have focused on customer convenience and have taken this decision at a very appropriate time."
The share of payment made using UPI, however, is not very large in terms of volumes traded on an exchange. This is simply because there are payment limits per day and per month. One Bitcoin, which will cost anything between Rs 550,000 and Rs 600,000, cannot be purchased using UPI. One has to buy the currency in smaller quantities, that is, in fractions of a unit. All other cryptocurrencies can be bought using UPI, since they are available for less than Rs 100,000 a unit. Ripple, the third biggest among them by market cap, trades at a nominal Rs 50.
UPI helps those who prefer payment interfaces over direct bank transfers because they are easier to transact on mobile phones. However, a new exchange which has launched its beta version is not depending too much on UPI and considers it only as an added means.
Ashish Agarwal, Founder, Bitfeu, a new cryptocurrency exchange, says, “UPI cannot be the top pick at all. This is kust one payment gateway option for exchanges and has the limitation of fund transfers on daily basis. Deposit volume per day is really good for most users. UPI does not help exchanges much, and only offers them another option for payment.”
Some 28-30 cryptocurrency exchanges have come up in India. Two discontinued business last month because volumes were thin ever since they launched. A few exchanges did face liquidity issues when banks began closing their accounts, but they are now back on track. While trading volumes on Bitcoin as a standalone currency are down, most exchanges have started offering multi cryptocurrencies during the past one month, effectively shifting incremental volumes to the newer offerings.