Buying or selling cryptocurrencies in India might not be that easy

Indians have been among the biggest investors in cryptocurrencies in the world. There are around 15-20 million crypto users in India. Investors are now eagerly awaiting the cryptocurrency bill, which was presented to Parliament in the winter session.

One of the reasons for the high usage of cryptocurrencies in India is that the process of buying and selling is straightforward, but is it as easy as it sounds?

We take a look at the process of buying and selling crypto coins in India and whether it is as easy as it sounds.

Cryptographic transactions

To start trading, the first step is to register with an Indian cryptocurrency exchange like WazirX or Coinswitch Kuber. Next, you need to meet the Know Your Customer (KYC) requirements. Once KYC registration is complete, you will be able to buy and sell cryptocurrencies.

Much like a bank account, a cryptocurrency wallet is a digital application that helps you store and retrieve your cryptocurrencies. A crypto wallet has a private key that is only known to the user and a public key, which is like an address and is used to send the crypto to the wallet.

Buying Cryptocurrencies: Since the Supreme Court overturned the Reserve Bank of India‘s (RBI) 2018 ban on rupee-to-crypto transactions in March 2020, things have been relatively easy when it comes to buy cryptocurrencies in India. However, not all banks allow their customers to link their accounts and transfer money to crypto exchange accounts. If your bank does not allow it, you will have to resort to peer-to-peer (P2P) lending.

There are several ways you can deposit Indian Rupees into a crypto exchange account. You can use National Electronic Funds Transfer (NEFT), Immediate Payment Service (IMPS) Unified Payment Interface (UPI), or a payment gateway. “You can deposit INR through online banking or a third-party wallet or you can use the P2P method for depositing,” says Bandhul Bansal, founder of Finstreet, a financial coaching company. It is important to remember that you cannot use cash to buy cryptocurrency.

Once you have the money in your account, you can use it to buy any cryptocurrency.

Selling Cryptocurrencies: “You can sell the cryptocurrency you hold in terms of rupees only through exchanges and then withdraw it to your bank account associated with your crypto trading account,” Bansal explains.

“It can be instantaneous or it can take up to two business days for the funds to reach your bank account depending on the amount,” says Sanghvi.

Is it that easy?

As mentioned earlier, the process became easier after the Supreme Court lifted the ban on rupee transactions for cryptocurrencies. However, not all banks are on board at the moment.

“After the Supreme Court lifted the ban on the RBI in March 2020, things are relatively easy. Some banks are still not friendly when it comes to allowing their customers to transfer money on crypto exchanges, ”says Bansal.

“There are a lot of gray areas when it comes to cryptocurrency transfers. While some banks allow their customers to transfer funds to cryptocurrency exchanges, other banks do not. For example, SBI has blocked the receipt of funds by crypto exchanges on its UPI platform. In addition, some banks that allow it offer the possibility of selecting customers. It is not open to all customers. We can only get more clarity when the regulations are in place, ”a banking expert said on condition of anonymity.

Additionally, you cannot withdraw money from your crypto wallets with exchanges as they are just trading platforms. When you want to cash out your cryptocurrencies, you need to select the INR option and send it to your savings account in your bank. Once there, you can withdraw it in cash from your bank or ATM.

There could also be a difference in the price at which you can buy the cryptocurrency, depending on the exchange you have an account with.

“Some exchanges offer a closed order book feature, which means you get one price, while others offer an open order book, which means your order is (the price) of another. buyer or seller and you get that price, ”says Naimish. Sanghvi, founder of Coin Crunch India, a multimedia cryptocurrency website.

Under the open order book, you could compare and negotiate prices. In the event of a closed order book, the stock exchange fully controls liquidity and sets a fixed price for the assets. Therefore, there is no room for negotiation here.

However, remember that while the process is straightforward, you should have a basic understanding of how cryptocurrencies work and do your due diligence before investing in cryptocurrencies.

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