Crypto goes abroad, returns as gift cards for Indians to buy groceries & gold
The mechanism involves leading fintech and e-commerce platforms incorporated in Sweden, Germany and Singapore. Individuals can use these platforms to obtain gift cards or vouchers, which effectively serve as proxy money, by transferring stablecoins from their private e-wallets to overseas entities.
Cryptocurrencies have become a unique aspect of the financial world, as some Indians are finding ways to "round trip" them abroad. This process allows individuals earning cryptocurrencies through legitimate or illegal means to use them for various purchases within India, all while avoiding detection by tax authorities and local banks.
The mechanism involves fintech and e-commerce platforms based in Sweden, Germany, and Singapore. These platforms enable users to purchase gift cards or vouchers using stablecoins from their private e-wallets. The vouchers act as proxy money that can be used for a variety of everyday expenses, including groceries, fuel, mobile recharges, food delivery, and even gold. These closed-loop prepaid instruments are not subject to monetary limits and fall outside of RBI regulation.
The overseas platforms either maintain an inventory of digital card codes or generate them through technology arrangements with their Indian partners. The crypto received from Indian users is sold overseas by the platform's parent or associated company, with the proceeds then used to make payments to Indian voucher partners.
Regulators, government agencies, and people outside the payments industry are still trying to understand how Indians can use crypto for everyday purchases. The scale and cross-border nature of these pathways have raised concerns about the potential implications for regulatory oversight.
Written by urgent.news from Times of India's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
