Crypto exchange Unocoin is allowing its users to recharge FASTag wallets using bitcoin, the company announced in a blog post. FASTag, the electronic toll collection system operated by the National Highway Authority of India, has been mandatory at all toll plazas in the country since January 2021.
Unocoin currently supports 17 FASTag operators and a top-up starting from a minimum of Rs 100 to a maximum of Rs 10,000, the company said.
The crypto sector is unregulated in India but that has not dented the aspirations of millions of Indians who view crypto as an emerging asset class. India recently ranked second in terms of crypto adoption among 154 countries, as per the 2021 Global Crypto Adoption Index by Chainalysis, a blockchain data platform.
What else can you use crypto for?
India: In India, crypto is yet to be directly accepted by any major company due to regulatory uncertainty. However, platforms like Unocoin and Bitrefill allow customers to use crypto to buy gift vouchers that can be used at hundreds of brands. Unocoin also allows its users to recharge phones and pay bills using bitcoin, but it supports this by converting the crypto to Indian rupees and settling with the merchant rather than paying the merchants directly in crypto.
Globally: While many crypto traders treat crypto as a speculative asset rather than a medium of payment, the number of companies accepting crypto as payment has risen rapidly over the last couple of years. Globally, some of the big companies that accept crypto for payment include Microsoft, Coco-Cola, Wikipedia, AXA Insurance, and Amazon-owned Twitch and Whole Foods. Electric vehicle maker Tesla, run by crypto advocate Elon Musk, is another big name that briefly accepting bitcoin but then put the plan on hold due to the high energy costs involved in mining bitcoin. In El Salvador, the government has made bitcoin a legal tender that can be used for all transactions. Earlier this year, Visa became the first major card network to settle transactions in crypto-currencies, with the direct acceptance of payments in USD Coin (USDC).
Regulatory state of crypto in India
India has been on the fence about cryptocurrencies as there is no law governing the crypto ecosystem. It has, however, not affected the risk appetite of investors as rumours of a crypto bill being in the works have dominated the news since 2019.
- The Reserve Bank of India banned regulated entities including banks from providing services to crypto exchanges in 2018. It said that cryptocurrencies raise concerns of “consumer protection, market integrity, and money laundering, among others”.
- A report by the Finance Ministry in 2019 (the report was drafted in 2017 but never made public) advocated for a ban on the use of cryptocurrency in India. The report was drafted by an inter-ministerial committee chaired by the secretary of the Department of Economic Affairs Subhash Chandra Garg.
- The RBI ban was then overturned by the Supreme Court of India in 2020 which said that the move was “disproportionate”. It led to a surge in sign-ups across various crypto exchanges in 2020.
- The Government of India said that it was looking to table the crypto bill before the Parliament so as to ensure there is clarity and transparency on the state of cryptocurrency in India.
- The RBI is also working towards a “phased implementation strategy” for the introduction of central bank-backed digital currency (CBDC), Digital Rupee, and examining use cases to ensure that its execution does not cause any disruption. It is targetting a December rollout.
- In August 2021, Finance Minister Nirmala Sitharaman informed the media that the proposed legislation on cryptocurrencies has been tabled before the Cabinet and is awaiting its approval. The bill has reportedly recommended that all cryptocurrencies, except the ones issued by state, be prohibited in India.
The Litecoin-Walmart partnership hoax and the need for regulations
The decentralised nature of cryptocurrencies has left the market susceptible to manipulation and volatility. Take, for example, the announcement of Litecoin’s, a popular cryptocurrency considered to be a fork of Bitcoin, partnership with Walmart on September 13, 2021, on GlobeNewswire. Major business publications like CNBC and Reuters featured it on their websites lending it credence. Bitcoin’s market price jumped by 20 percent following the news. Many thought that a cryptocurrency had finally been acknowledged by a major retailer and other businesses would soon follow suit.
The enthusiasm waned as quickly as the price of Litecoin after the announcement turned out to be a hoax. Walmart rushed to clear up the confusion by stating unequivocally that it was the subject of a fake news release.
This incident is certainly not unique to the crypto ecosystem as is evident from various manipulative schemes in the equity market. But, it must be noted that stock market manipulation invites consequences in terms of fines and prison time for culprits. This is where the crypto market lags as it is yet to find a way to assure sceptics and investors alike that it can punish opportunists and manipulators. The lack of a mechanism to deal with such tactics is hurting investor sentiment around crypto.
Would you use crypto to recharge your FASTag wallet? Why is this even being done? Leave us a comment