Cryptocurrencies No More a No-Go Zone for Business

You can now use Bitcoin or other cryptocurrencies to buy goods like a rug or for services such as recharging Fastag in India.

Cryptocurrency is increasingly gaining in prominence as a payment method among a small yet growing set of businesses in the formal and informal economy in India. They have started to accept Bitcoin, Ethereum, Solana, and other crypto tokens in exchange for goods and services amid the rising popularity of the digital asset in India. ET spoke to various businesses – from a fitness trainer in Chandigarh to a tattoo parlor owner in Delhi NCR – to understand the allure of using crypto for payments.

In some instances, the use is being dictated by businesses trying to ride on the crypto frenzy that had built up over the Covid-19 pandemic, while for some businesses the acceptance is an attempt to get ahead of the curve.

In the absence of any law specifying treatment of cryptocurrency, legal experts said the use of cryptocurrency for payments in India is neither legal, nor illegal. This has not deterred businesses or customers from opting for such transactions.

India’s oldest crypto exchange, Unocoin, for instance, has allowed its users to recharge their Fastag accounts using Bitcoin. It is also allowing Bitcoin transactions for bill payments, and e-commerce.

Since going live with Bitcoin top-ups for Fastag, it has seen transaction to the tune of Rs.8-10 lakh in the last 2-3 weeks, 50% of which were made by those aged over 35, Sathvik Vishwanath, cofounder of Unocoin, told ET.

The exchange wants to revive the original intent behind creation of Bitcoin, which was “fast and free payment” from anywhere in the world without a middleman, and to expand its use cases for retail traders, which currently stand over 15 million in India according to industry estimates. “Nowadays, it is going way too much towards an asset class, and the utility part is getting side-lined,” Vishwanath said.

Raghav Gupta, director of The Rug Republic, an Indian décor branded that sells home décor items, said the company wants to show the regulators that there is support for crypto from the Indian business community.

These developments come at a time when jurisdictions across the world such as the US city of Miami, and El Salvador have allowed citizens to use Bitcoin as legal tender for payments. However, the Reserve Bank of India (RBI) has been vocal about its concerns regarding cryptocurrency and is keen on banning the use of private crypto.

The government, on the other hand, has indicated its preference toward classifying crypto as an asset class, similar to gold.

Legal experts said that a lack of relevant statutes makes such transactions akin to barter deals where the acceptance is purely at the discretion of the recipients.

“Currently, cryptocurrency is only being accepted as payment by certain platforms in India such as specific restaurants, online e-commerce platforms, etc. In the absence of dedicated cryptocurrency laws or any specific ban on the same, cryptocurrencies in India fall in a grey area, and the acceptance of the same as a mode of payment is at the discretion of the recipient,” said Anu Monga, partner, Anant Law. S-ET

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