Bitbns builds a bridge Other exchanges remain wary of

But crypto exchange Bitbns – via a related company called OnRamp – appears to have found a roundabout solution to the problem. OnRamp has integrated UPI as part of its payment streams and users can make instant transfers to select and buy from over 300 crypto tokens.

OnRamp is a separate entity for Bitbns, but is run by the same founding team as the exchange and has been in operation for the past six months.

But this is not the first time a crypto exchange has tried to cash in on UPI transactions. In April 2022, US-based crypto exchange Coinbase announced that it had enabled UPI payments as part of its launch in India. But that announcement didn’t play out the way the crypto exchange planned. Hours later, UPI’s governing body, the National Payments Corporation of India, issued a statement suggesting that it was not comfortable linking UPI to crypto.

Just a few days later, Coinbase announced that they were closing the bridge between crypto and UPI.

And now Bitbns – aiming to solve instant money transfer problems for crypto – has resurrected it, Gaurav Dahake, CEO of Bitbns, told BQ Prime. “We want to make a more compliant process,” Dahake said, referring to their transaction flow for UPI.

Instead of using a payment processing company’s services for UPI transactions, OnRamp displays a UPI ID for a bank account with a private bank to which customers will send money. In return, OnRamp gives them crypto tokens of their choice. OnRamp follows fit and proper KYC checks for customers using Aadhar authentication, Dahake added.

NPCI and RBI’s stance on crypto has not changed and OnRamp has just found a loophole that they are exploiting, the founder of a rival crypto exchange told BQ Prime on condition of anonymity.

While Dahake stated that if the regulators were to close this bridge, they would be in violation of the Supreme Court order of 2020. The order overturned an RBI circular that restricted financial institutions from offering services to crypto businesses. At the time, the apex court stated that the RBI’s ban violated the freedom to carry on trade guaranteed by Article 19(1)(g) of the Indian Constitution.

“This argument is wrong,” Sharat Chandra, co-founder of the India Blockchain Forum, told BQ Prime. Banks can choose to enable or disable services for a specific business as per their choice, he added.

Although Bitbns has moved in this direction with OnRamp, other exchanges do not want to touch UPI with a flagpole. Both WazirX and Unocoin have made no move to bring back UPI for crypto buying or selling, two top executives at the exchanges told BQ Prime on condition of anonymity.

This is likely to have a negative impact for everyone if regulators turn sour again, said a senior WazriX executive.

On his part, Dahake believes that having a fiat-to-crypto ramp with instant payments i.e. UPI is essential to ensure the growth of crypto in India. The firm also has plans to expand OnRamp to other jurisdictions, such as Brazil, Mexico and the United Arab Emirates, Dahake said.

However, how far the bridge goes in India may depend on how regulators assess it.

Indian crypto exchanges have also been in talks with the government to formalize rules on reporting and monitoring illegal transactions, including money laundering, BQ Prime reported on Monday.