Indian regulators' clampdown on cryptocurrency businesses is forcing the exchange startup Unocoin to experiment with stablecoins and ATMs to continue receiving fiat deposits from customers.
Unocoin co-founder Sunny Ray told CoinDesk his company hasn't been able to transact through regular banking channels with its 1.3 million customers for several months, after the Reserve Bank of India (RBI) banned banks from working with crypto or crypto companies in April.
Most recently, Unocoin set up an ATM in a Bangalore mall where customers can deposit rupees to their exchange accounts without a bank or credit card. In the coming weeks, Unocoin will open a few more ATMs in Mumbai and Delhi.
"We're essentially employing bank-grade ATM machines," Ray said.
Also, some users are quickly transferring their rupees to the ethereum-based TrueUSD token, which Unocoin began supporting in August, then using it to purchase bitcoin or other assets down the line when the price feels right. As a so-called stablecoin, TrueUSD is designed to maintain parity with the U.S. dollar.
For customers outside Bangalore, support for stablecoins may provide an indirect way to add or hold value in their Unocoin accounts without quite as much volatility, albeit it falls short of a fiat on-ramp. However, that transaction volume is still less than a few thousand TUSD per day.
"We never even considered that [stablecoins] before," Ray said. "That's more just like a stop-gap solution. It's not like an actual, final solution to everything."
As Unocoin investigates how to scale compliant ATMs, Ray said the team is also looking to expand to Malta and Canada, in case operating in India becomes impossible altogether, all while exploring the options for listing several new stablecoins.
Stepping back, an ongoing legal battle to overturn or alter this ban hasn't yielded any results to date. Meanwhile, the ban is having a disastrous impact on India's crypto community, with the popular exchange startup Zebpay abruptly shutting down late last month.