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When crypto startup BuyUcoin Co-founder Shivam Thakral was still a student at Harcourt Butler Technical University in Kanpur back in 2015, he would often take up freelance website development assignments from overseas clients. One day, that same year, a client asked him if he accepted payment in Bitcoin. 

Unaware what that meant at the time, Shivam looked it up and realised he could accept Bitcoin from the client and liquidate it to receive INR in his Indian bank account. He agreed to accept his payment in Bitcoin, and soon enough, Shivam received the payment in under six hours — much faster than the five-to-seven day time period taken for overseas payment transactions in fiat currency.

The engineer also realised that there weren’t many Indian companies working actively in the crypto space. 

This inspired him to start and build bootstrapped crypto startup BuyUCoin —India’s first multi-cryptocurrency exchange, based in Delhi-NCR, where merchants and consumers can easily transact in — buy, sell and trade — or store Bitcoin, and several altcoins such as Ethereum, Ripple, and others. 

In just nine days, Shivam built a “basic website” where users can buy and sell Bitcoin. Using this website as his minimum viable product, Shivam approached several of his engineering college batchmates. Two of them – Devesh Aggrawal and Atulya B – showed the most interest, and together, they co- founded BuyUCoin in 2016 while still in college. 

Elaborating on what their journey has been like and the market opportunity going forward, Shivam told YS Founder and CEO Shradha Sharma, 

“In the past five years, we have seen extreme highs and lows in our journey – from the highs of the 2017 crypto bull-run to the lows of the period following the RBI ban on crypto trading to the more recent Supreme Court ruling lifting the ban. So this industry is here to survive, will continuously evolve, and become the next name in the financial industry.”  

Simplicity – the key differentiator

Five years since its launch, BuyUCoin is today among the leading Indian crypto exchanges with over one million traders and holders investing in over 130 cryptocurrency pairs such as BTC-INR, ETH-INR, and DOGE-INR, among others. 

But the trio faced challenges in the initial years when building the product as the market in India was still in its nascent stage, with no real playbooks to turn to. 

Co-founder and CTO Devesh, who built the platform from Shivam’s website, says, “Now, building a crypto exchange looks easy. But when we started, we found it challenging to partner with service providers and had to build the platform ourselves with no team and no guidance. Until 2018, we had no payment channels, and had to rely on direct bank transfers.”

Still, BuyUCoin co-founders worked early on to come up with differentiators in their product. The top priority for them was ensuring simplicity, so users can easily buy, sell, manage or store their cryptocurrencies on a platform that’s intuitive and secure. 

“Some Indian exchanges copied global exchanges in terms of showing investors the real-time order book. But we wanted to keep our interface simple and intuitive by not showing users the order book. Rather, we showed a single rate at which an investor could buy a particular cryptocurrency, and the user could simply make the transaction at the click of a button,” Shivam explains.

By March 2018, the feature helped BuyUCoin add two lakh users, and observing this traction, other exchanges began to introduce such a feature too, the founders claim.

Revenue model and scalability

BuyUCoin’s revenue model comprises two channels —percentage-wise commissions on transactions and margins on quick and easy trades.

“The first one is common across exchanges. We earn commission on transactions from buyers and sellers. The second one involves a small margin on transactions on our OTC platform for cryptocurrency trades, and the trader is shown the final transaction amount inclusive of our margins. 80 percent of our traction comes from this second channel,” Shivam explains.

BuyUCoin’s OTC platform allows investors and traders with large trades outside the range of open order books to buy and sell crypto. Its OTC Desk enables high-volume trades with easy, quick, and safe settlements, and the startup’s OTC agents provide highly customised services to their users.

In anticipation of  a surge in trading volumes, which have in the past caused crypto exchanges to crash, BuyUCoin is scaling its systems as well as its support systems for customer service.

“To build a scalable crypto exchange that never crashes, our support systems also have to be scalable. So we set processes that allow our support and operations teams to function smoothly alongside the exchange. We are also building a self-help system where customers can use their transaction IDs to check the status of their deposits and withdrawals themselves without raising a ticket,” Devesh adds.

Growth amidst regulatory uncertainty

BuyUCoin is playing in an Indian crypto industry rejuvenated by a recent RBI clarification that its 2018 circular preventing banks from dealing in “virtual currencies” is invalid and cannot be cited anymore after it was set aside by the Supreme Court in 2020.

The cryptocurrency industry welcomed this statement from the RBI and viewed it as an approval on the use of bank accounts for such transactions.

Shivam says:

“Earlier, banks used to show us the 2018 circular even though it was set aside. This made it difficult to work with them. Now, with the recent clarification, we are confident when talking to banks. However, we don’t deal with banks directly for user deposits and withdrawals. Instead, we partner with payment gateways, aggregators and processors who deal directly with banks. Mobikwik is one such example.”

Last year, BuyUCoin announced it was entering into a partnership with Mobikwik to integrate the fintech startup’s payment gateway service with the crypto exchange platform to have Mobikwik as a payment option. This means, Mobikwik’s users are also able to directly buy cryptocurrencies on BuyUCoin using Mobikwik wallet money. 

Still, despite the recent RBI clarification, there is no clarity yet on whether the RBI has approved the functioning of cryptocurrency (the legislative bill titled “The Cryptocurrency and Regulation of Official Digital Currency Bill, 2021,” is still pending in the Parliament). 

Nevertheless, blockchain innovation and crypto trading is slowly becoming mainstream in India, and exchanges like BuyUCoin, WazirX, CoinDCX and others are poised to capitalise on the influx of new investors and traders.