While Indians are flocking to profit from the crypto frenzy, the cryptocurrency has some practical issues, as it cannot be used for daily transactions. Nevertheless, the crypto space in India has grown dramatically, with Indian investments increasing to more than $10 billion in April 2020, up from $923 million in April 2019. Here's what you need to know if you want to convert your crypto assets into cash.
Through cryptocurrency exchanges
The first way to convert any cryptocurrency into cash is through an exchange or a broker, which is similar to the currency exchange system at foreign airports.
You deposit your cryptocurrency into an exchange like WazirX, CoinDCX, CoinSwitch Kuber, or Unocoin and then request a withdrawal in the currency of your choice. The money will be deposited into your bank account. Let's look at Bitcoin as an example of a cryptocurrency that you want to convert into cash.
Transfer your Bitcoins to an exchange that allows you to buy and sell in Indian rupees. In this case, we'll use WazirX to show how it works.
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Step 1: Open the WazirX app and select the 'Funds' tab.
Step 2: Select the INR option to view your account transactions, deposits, and withdrawals.
Step 3: At the bottom of the screen, you'll see two buttons labelled 'Deposit' and 'Withdrawal.'
Step 4: Select the withdrawal option, where you can enter the amount you want to withdraw. Now, enter the amount and click the submit button.
Step 5: You will soon receive an email in which you must authorise the withdrawal. The funds will be reflected in your account shortly after you have verified.
This method is considered the safest, but it takes 4-6 days for funds to arrive in your account. Furthermore, cryptocurrency exchanges charge a transaction fee, which varies by broker.
Through peer-to-peer network
You can sell Bitcoin for cash on a peer-to-peer platform for a faster and more anonymous withdrawal. LocalBitcoins is a well-known peer-to-peer platform.
Sign up for a peer-to-peer exchange platform and select your ideal buyer's location. Then, utilise the marketplace to locate buyers. Most peer-to-peer platforms offer an escrow option, in which your Bitcoins are not released to the buyer until you confirm payment has been received.
It is critical to be aware of fraudsters when using the peer-to-peer selling method. It is also strongly advised to use a peer-to-peer platform that allows you to keep your Bitcoins locked until you have received payment from the buyer.
It is important to note that if you cash out your crypto assets, you will have to pay taxes on your profits — while crypto is currently illegal in India, investing in this asset is not exempt from taxes.