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Unicas’ cryptocurrency based neo-bank is now in three states

Unicas, the global cryptocurrency financial institution, opened its third physical bank branch in New Delhi on Wednesday. Through the bank branch Unicas will offer banking services based on fiat and cryptocurrencies to the general public, the company said in a press release. It currently has two other branches in Jaipur and Jamnagar in the west of the country, it said.

Unicas is a joint-venture between United Multi State Credit Cooperative Society and the London-based Cashaa, a blockchain fintech. The company will open more branches in Rajashthan, the National Capital Region and Maharashtra going forward. “In order to accelerate the understanding of crypto among common people, it also runs knowledge centers within their physical branches. These knowledge centers provide in-depth information to people on cryptocurrency, blockchain, and banking functionality. The entire model of the financial institution has been created to offer a next-gen experience of banking to users and also create awareness while bursting any myths,” the company said.

Univas will offer customers the option to buy its native crypto-currency CAS, which can be used to access banking services like a savings account with a 9.67% interest rate and Cashaa’s wider banking platform.

“Cryptocurrency is the future. Currently, lack of awareness is the root cause of the speculations going around. Through Unicas, we are providing an opportunity for users to explore various facets of cryptocurrency and see how the asset along with the blockchain technology can take the entire banking experience a notch up. We have faith in the government and we understand that they will announce regulations that will help in the overall holistic growth of the industry and also tighten the grip over any scams running in the name of crypto,” said Kumar Gaurav, founder and chief executive officer, Cashaa.

While Cashaa and the United Multi State Credit Cooperative Society are going ahead with their crypto neo-bank strategy, the government plans to introduce legislation to ban ‘private’ crypto-currencies.

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Crypto neo-bank strategy

Ever since the Reserve Bank of India’s April 2018 circular — which prohibited banks from providing services to businesses dealing with virtual currencies — was over-turned by the Supreme Court in March this year, the domestic cryptocurrency industry has been functioning without any regulatory oversight. Unlike commercial banks and cooperative banks that are regulated by the RBI or by the National Bank for Agriculture and Rural Development (NABARD), multi-state credit cooperative societies are regulated by the Central Registrar of Cooperative Societies under the Multi-State Cooperative Societies Act, 2002. These credit societies can either be formal business organisations or a registered collective of individuals who come together to pool their savings and provide loans to their members.

According to Dinesh Kukreja, managing partner and chief executive officer, Unicas said that in the last two months Unicas has handled over Rs 3 crore worth of transactions through its crypto neo-bank. MediaNama had earlier reported on Unicas’ strategy in India.

Gaurav had told MediaNama that UNICAS will be responsible for digitising branches of the credit society and providing the back-end technology infrastructure to enable the crypto-banking services. “Customers can deposit Bitcoins to earn interest and they can also take a loan against this holding as collateral. These branches will be converted into a crypto-lounge with trained staff to explain how crypto-currencies work and the investing benefits,” he said.

During the first phase of this partnership, the credit society alongside UNICAS will launch a campaign to educate potential customers about the benefits of investing in and trading in cryptocurrencies. In the second phase they will begin opening accounts for crypto investing and thereafter, in the third phase the society will offer loans against cryptocurrencies through smart contracts, Kapur explained. “We are targeting customers between the ages of 40 to 60 years in the Tier-2 and beyond locations, since they have a lot of wealth compared to the younger crypto-currency audience in the country,” he said.

On the deposits side, a customer can either buy Bitcoins, Binance, Bitcoin Cash, Ethereum, Ripple or other cryptocurrencies in cash or use their existing deposits held by the credit society to buy the cryptocurrencies. These depositors can earn interest rates of around 6% since their cryptocurrencies will be used for on-lending to others, Kumar said.

On the lending side, a customer can receive a loan up to 70%, for instance, against their cryptocurrency holdings. For example, if a customer has ₹10 lakh worth Bitcoins they can get a ₹7 lakh loan against the cryptocurrencies which will be pledged as collateral with the credit society. In turn, Cashaa will use these pledged cryptocurrencies as additional liquidity for the decentralised finance universe which globally has crossed $11 billion globally, Kumar said.

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Also Read


MediaNama has prepared a guide on crypto-currency regulations in India, listing the government’s position over the last few years and various policy recommendations; read it here: A complete low-down on crypto-currency regulation in India

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