A new bitcoin exchange service has launched in India, amid a growing wave of digital currency interest in the world’s second largest country.
Unocoin launched at the well-attended Global Bitcoin Conference, India’s first, in Bangalore on 15th December. It is currently running on a ‘trial basis’ and new verified users are limited to buying/selling 10 BTC per day.
Vikram Nikkam, a director of parent company Unobit Solutions Pvt. Ltd, said full cooperation with financial regulations was a key point in gaining acceptance. Local banks were receiving client monies and making payments without issue. He said:
“It is an extra special project as it is built to facilitate the value transfer of bitcoins between individuals online in compliance with the KYC and AML policies in India.
It is a platform giving every Indian the opportunity to have some bitcoins in their possession and thereby India does not miss out on this technology like we did in the case of the Internet.”
Regulatory compliance
To become verified, users need to have an Indian PAN (Personal Account Number) and card, which are required for all all documents pertaining to financial transactions in India. They must also supply a full name and contact details with proof of address, and an optional photo. Transfers are handled via linked bank accounts.
Users can send and receive bitcoins without limits, and users who trade local currency for bitcoins regularly for 60 days or more are elevated to Gold User status, with higher limits.
It’s also possible to send bitcoins to a friend via email whether the recipient has an existing bitcoin wallet with Unocoin or not. If not, they would be invited to sign up with Unocoin to claim the amount.
Unocoin also has two-factor authentication and the ability to generate paper wallets with client-side JavaScript to take bitcoin storage completely offline.
Fertile ground for bitcoin
The large number of IT professionals and businesses located in India these days could drive interest in bitcoin and play an important role in its growth.
The bitcoin meetup group in Bangalore, a center of the country’s burgeoning IT sector known as “India’s Silicon Valley”, has over 400 members. There are numerous other local groups in other tech centers throughout the country, with the Bombay Bitcoin group in Mumbai raising similar numbers.
The team behind Unocoin also runs CoinMonk, a site that seeks to educate newcomers on how to use bitcoin. It also features a block chain explorer, manufactures physical bitcoins for sale in smaller denominations like 0.01 BTC, and sells shares in its bitcoin mining operation.
Another popular exchange in India is buysellbitco.in, which also verifies account holders are Indian residents with PAN cards, and gives prices in local currency. It fixes exchange rates for one hour at a time, and also trades in litecoin.
Financial services
With recent developments in China causing uncertainty for bitcoin, it’s possible attention could now shift to India. With its 1.2 billion population and the world’s 10th largest economy comes enormous potential for growth.
There is also a large market for international remittances and a large proportion of the population without access to banking services. Nikkam said:
“India houses about 700 million unbanked individuals which is one of the biggest issues that banks here are trying to resolve.
Bitcoin has the potential in that sense to very smoothly minimise this challenge, which is precisely what we are trying to present to financial institutions in the country.”
There is also evidence Indians are looking for alternatives to cash to store their wealth. India accounts for 20% of the world’s gold demand, making it the largest market in the world. The national government has tried to curb this demand to control the country’s current account deficit, increasing import duties from 2% to 15% over the past two years.
There were reports recently that India’s central bank would join other around the world by issuing a warning on bitcoin use, citing price volatility and the dangers of bitcoin investment schemes.
Bangalore image via Shutterstock