Unocoin, an Indian cryptocurrency exchange, is set to allow its users to purchase gift vouchers from major brands using Bitcoin, the company has announced. Although several cryptocurrency payment options are available in the U.S. and other countries, Unocoin’s service is the first major cryptocurrency payment service that will allow Indians to use their Bitcoin to purchase everyday products and services. 

Registered Unocoin users who have completed know-your-customer processes will be able to buy vouchers ranging in value from 100 rupees (US$1.35) to 5,000 rupees. Vouchers’ values vary according to the brand, Sathvik Vishwanath, CEO and co-founder of Unocoin, told Forkast.News.

The users will be able to purchase vouchers for brands in segments including fashion, travel, lifestyle, clothing, accessories and hotels. Some prominent brands include Domino’s Pizza, pharmaceutical and healthcare company Himalaya, online travel agency, jewelry brand Joyalukkas, Baskin-Robbins ice cream, kitchen appliance brand Prestige and Indian cafe chain Café Coffee Day. 

Eligible Unocoin users can simply log in to a website or app, select the value of the voucher they wish to purchase, and pay the equivalent Bitcoin price. The Bitcoin value of the vouchers is updated as per the token’s market price at checkout. Users can redeem the vouchers either on merchants’ websites or at physical stores. 

Popularizing payments

Founded in 2013, Unocoin has more than 1.3 million users. Over the years, the exchange has tried to popularize Bitcoin payments in India, with features allowing merchants to accept crypto payments and users to pay their utility and phone bills with crypto. However, the newly introduced feature makes it easier for retailers, which do not have to worry about integrating crypto payments on their platforms. 

Unocoin’s move was driven by strong demand among both customers and retailers, Vishwanath said. He added that cryptocurrencies such as Bitcoin were largely used as investment assets, and that the new feature aimed to give users a taste of the real-world utility of cryptocurrencies.

Vishwanath said many Unocoin users had previously enquired about real-world uses of cryptocurrencies apart from its use as an asset. 

Cryptocurrency investments in India have increased significantly since last year, even as the government continues to oscillate between a blanket ban and a softer regulatory approach. In 2018, then-finance minister Arun Jaitley announced that India would move not only to ban crypto but also to criminalize its use as a payment method.

Jaitley’s speech guided a report submitted by the inter-ministerial committee set up to recommend cryptocurrency legislation, and has been echoed since by other authorities. The country’s central bank has continued to support a ban on all private cryptocurrencies. 

Speaking at a webinar last month, Reserve Bank of India Deputy Governor T. Rabi Shankar said: “Private virtual currencies sit at substantial odds to the historical concept of money. They are not commodities or claims on commodities as they have no intrinsic value; some claims that they are akin to gold clearly seem opportunistic.” 

The RBI has consistently discredited claims about cryptocurrency use for payments, saying it could function as money. The country’s top court noted in a judgment passed early last year that virtual currencies fell under the definition of non-traditional currencies, and added: “It is not possible to accept the contention…that VCs are just goods/commodities and can never be regarded as real money.”

Bank’s bark worse than its bite

However, most industry experts remain optimistic about India’s crypto regulation. In a recent interview with Forkast.News, Sandeep Nailwal, COO of Polygon, said that most reports about bans were over-hyped by the media. He added:  “I have not found even a single [Indian] team that is trying to build some technology-related solution being haggled by the government. Nobody has been touched upon by the government.” 

He added that the government’s main concern was to stop cryptocurrency from funneling into the black market and to eradicate gambling and money-laundering activities using crypto. 

Vishwanath said Unocoin’s new feature was like a barter system that demonstrated Bitcoin’s transfer-of-value capability. 

He added: “We have definitely heard various stances from the government at various points of time … but nothing has become the law of the land yet. So we will continue to wait and watch but eventually, if it comes to [crypto] payments becoming impossible to use, then I think India will only have the ability to reap benefits from its [Bitcoin’s] value increase.”

A crypto regulation bill was first listed on the parliamentary agenda during the winter season, but was not brought before the legislature and has been postponed indefinitely.