One of India’s largest bitcoin exchanges, Coinsecure, now offers an account that does not require identification for deposits. “Users can submit their KYC when they want to withdraw or deposit INR and avail the discounted fee of 0.3%,” the company explains. “This removes the process of having to complete verification to start trading in Bitcoin.” Know Your Customer (KYC) identification requirements are demanded by regulators across the globe.
The new Entry Level Trading Account for International Users, was created strictly for international investors who have noticed the high price of bitcoins in India and would like to partake in trading.
“With the global community eyeing the Indian market for a while now, considering the opportunities, this move will help people truly take advantage of arbitrage.”
Indian exchanges typically see very little trade, with 322 bitcoins bought and sold across four exchanges tracked by BNC in the past 24 hours. That makes the Rupee the 16th most traded currency, sitting between the South African Rand and Nigerian Naira. Rupee trading accounts for 0.0047 percent of the global bitcoin trade volume, despite India being the world’s second most populous country, over five times larger than the USA.
The situation is changing fast, however. Just under two weeks ago, the Prime Minister of India surprised the nation and the world by announcing that two of the largest denomination rupee bills were immediately no longer legal tender.
The move forces everyone in India to deposit the notes in a bank, at which point they would be liable for any outstanding tax. While the unprecedented action may have helped reduce tax evasion, Bitcoin has recently started selling for a premium on Indian exchanges.
“In the wake of demonetization in the country Bitcoin is certainly impacted commoners are now exploring alternative cryptocurrencies and the demand for Bitcoin has gone up.”
A glance at the exchange’s order book shows that their claim isn’t an exaggeration. Customers at Coinsecure have recently put 12,495,125 Rupees (US$183,374) up for sale. Meanwhile, the same order book lists only 62.9 bitcoins for sale, worth only US$45,917 at current rates. With about half the current volume of competitor BTCXIndia, Coinsecure still has some catching up to do.
With all this new interest, there simply aren’t enough bitcoins in the market. The going price for a bitcoin has recently been $900 in India, and was nearly $200 more than other international exchange prices.
The price of one Bitcoin on Coinsecure is about 59,990 rupees (US$881), a solid 20 percent premium over going rates in most other countries. Of the top 50 currencies traded for bitcoins today, only the Nigerian exchanges have a worse problem with liquidity, with one bitcoin selling for $1,248 dollars in Nigerian Naira.
“Now with the limited supply of Bitcoin across the country, liquidity is definitely a challenging issue and that is now clearly driving the price of Bitcoin upward as compared to the global markets.”
Coinsecure is one of the oldest exchanges in India, Having launched in July 2014. The bitcoin startup has carefully forged banking partnerships with ICICI, YES, and Axis Banks, ensuring steady access to banking services and Rupees.
The company launched India’s first real-time market trading app in the Google play store last month, allowing Indians to trade bitcoins on the go. However, competing exchange Zebpay, offers a bitcoin buying app that has been downloaded more than 100,000 times.
Prior to their app’s launch, the exchange experimented with ways to adjust the bitcoin transaction fees charged while using their system. The upgrade gave customers the option to manually control the network fee, based on the priority of their Bitcoin transactions. A recent integration with NETKI allowed users to create wallet names for themselves at the exchange.
“With over 190 million smartphone users in India, putting a technology so disruptive like Bitcoin in their hands is a win win situation.”