While Indians are flocking to earn quick profits out of the crypto frenzy, there are some practical issues with the cryptocurrency— as it cannot be exactly used for daily transactions. Nevertheless, the crypto space in India has grown massively with Indian investments increasing to over $10 billion from $923 million in April 2020. If you’re looking to convert your crypto assets into cash, here’s what you need to know.
The first method to convert any cryptocurrency into cash is through an exchange or a broker, this is quite similar to the currency exchange system at airports of a foreign country.
You deposit your cryptocurrency into an exchange such as WazirX, CoinDCX, CoinSwitch Kuber, Unocoin , and request a withdrawal in the currency of your choice. The withdrawal will be paid into your bank account. Let’s understand this by taking Bitcoin as an example of a cryptocurrency that you want to convert into cash.
Transfer your Bitcoins to the exchange that supports buying and selling in INR. In this case, we use WazirX, for demonstration purposes.
Step 1: Open the WazirX app, and tap on the ‘Funds’ option.
Step 2: Click on the INR option and you will be able to see your account transactions, deposits, and withdrawals.
Step 3: At the bottom of the screen, you will be able to see two options, ‘Deposit’ and ‘Withdrawal’.
Step 4: Click on the withdrawal option, where you will be able to enter the amount you need to withdraw. Now, enter the amount and submit.
Step 5: You will receive an email soon, where you have to authorise the withdrawal. Once you have verified, the funds will be reflected in your account shortly.
This method is considered the safest, but at the same time, the time for money to reach your account is about 4-6 days. In addition, crypto exchanges also charge a fee for the transaction, and it differs from broker to broker.
For a quicker, more anonymous withdrawal, you can use a peer-to-peer platform to sell Bitcoin for cash. One of the most popular peer-to-peer platforms is LocalBitcoins.
Sign up on a peer-to-peer exchange platform and choose the location of your ideal buyer. Then, use the marketplace to find buyers. Most peer-to-peer platforms have an escrow option where your Bitcoins are not released to the buyer until you have confirmed you have received payment.
While using the peer-to-peer selling method, it is crucial to be aware of fraudsters. Also, it is highly recommended to use a peer-to-peer platform that lets you keep your Bitcoins locked until you verify the payment has been obtained from the buyer.
It is worth noting that if you cash out your crypto assets, then you will need to pay taxes on your profits — although crypto currently exists in a legal grey area in India, investing in this asset is not outside the ambit of taxes.