Imagine standing at a roadside tea stall or an airport lounge in India, scanning a regular UPI QR code—just like you would with Google Pay or PhonePe. But instead of paying from your bank account, you’re using crypto. No fiat top-up. No exchange conversion. Just pure, seamless blockchain-to-INR payment.
A Reddit post recently went viral, showing a user paying a merchant via PhonePe UPI using USDT (Tether) from a crypto wallet called Payx UBIT. No fiat top-up. No exchange in between. Just a direct crypto-to-INR transaction that looked indistinguishable from a standard UPI payment.
If true, this could mark a tectonic shift in Indian fintech. But is it as revolutionary as it seems? The app isn’t even listed on the Play Store.
How Does It Work?
1. Crypto-to-UPI Conversion
Users deposit USDT (a stablecoin pegged to USD) into the app.
- The app converts USDT to INR at a fixed rate (~₹82–85/USDT), which is below the market average of ~₹92.
- The converted funds can then be used for UPI payments, mobile recharges, bill settlements, and even cross-border transactions.
2. Virtual Card & eSIM Services
- For a one-time fee of $25 (approx. ₹2,000), users get a virtual card and eSIM.
- These features allow crypto-based payments even where UPI isn’t supported.
3. Beta Testing & Access
- The app is currently in beta and only available via APK download.
- Limited to the first 20,000 users, who receive a 50% discount on transaction fees.
Why Is This Considered Revolutionary?
First of its kind in India: No other app currently lets users make UPI payments directly using crypto. It’s a breakthrough in blending blockchain with India’s dominant payment system.
Works globally: Payx reportedly supports both domestic and international transactions, making it more versatile than typical crypto wallets tied to local networks.
Fills the post-Binance card gap: With popular crypto cards like Binance and Wirex disabled, Payx offers a new way to spend crypto for everyday use.
No exchange required: Users can bypass traditional crypto exchanges and directly pay merchants from their USDT wallet—saving time and simplifying the process.
Key Concerns and Red Flags
1. Hidden Losses in Conversion Rates
- USDT is priced at ₹82–85 on the app versus the market price of ₹92.
- Example: A ₹3,212 purchase used 38.84 USDT, implying a loss of nearly ₹388 due to undervalued conversion.
2. Crypto Taxes and Indian Regulations
India’s tax regime for digital assets is among the world’s strictest:
- 30% Flat Tax: Under Section 115BBH of the Income Tax Act, gains on crypto transactions are taxed at a flat 30%—no deductions allowed.
- 1% TDS: Section 194S mandates 1% tax deduction at source on transfers if:
- Annual transactions exceed ₹50,000 (individuals)
- Or ₹10,000 (businesses or professionals)
Example: Buy USDT at ₹2,500, spend it when it’s worth ₹3,000 = ₹500 gain. You owe ₹150 in tax plus ₹30 in TDS.
“Users need to maintain meticulous records of crypto transactions to remain compliant,” says fintech advisor Priya Menon. “Ignoring tax implications could lead to audits or penalties.”
3. APK-Only Distribution
- Not being on the Play Store raises concerns about app authenticity and malware risks.
- Lack of transparent KYC, user data policies, or consumer grievance redressal is a red flag.
- Even if FIU-registered, full regulatory backing from RBI or SEBI is still pending.
4. Historical Failures of Crypto-UPI Models
- Solana’s 2022 UPI demo failed to gain traction due to unclear regulations and low public trust.
- Payx could face the same roadblock if regulations tighten or awareness falls short.
Will It Survive in India’s Tight Regulatory Framework?
It Might, If…
- The app improves its USDT-INR exchange rates.
- Regulatory bodies issue favorable crypto payment guidelines.
- A formal launch with RBI/SEBI-aligned compliance and user protections is rolled out.
It Could Fail, If…
- Authorities clamp down on crypto-linked UPI transactions.
- APK distribution creates trust or security breaches.
- Competitors build more compliant or bank-partnered alternatives.
Final Thoughts
This isn’t just another crypto app. It’s a radical experiment testing the limits of India’s financial innovation and regulatory patience. By marrying UPI’s mass adoption with crypto’s borderless value, Payx offers a vision of frictionless payments that don’t wait for bank approvals.
Whether this is the dawn of a new payment era or a fleeting workaround before regulators catch up is yet to be seen. But one thing is clear—crypto utility is no longer just theoretical in India.
Crypto + UPI in India: FAQ
Q. Is it legal to use crypto for UPI payments in India?
- Technically, India hasn’t banned crypto usage, but using it as currency is discouraged. While spending crypto is not explicitly illegal, it’s in a regulatory gray zone.
Q. Do I need to pay tax if I spend crypto instead of converting it to INR?
- Yes. Any profit made when spending crypto is taxable at 30%, with a 1% TDS in applicable cases.
Q. Is downloading an APK safe?
- APK files can be modified or malicious. Only download from trusted sources and ensure the app is FIU-registered.
Q. Will the app come to the Play Store?
- That depends on regulatory clearance and Google’s policies on crypto apps in India.
Disclaimer: This article is for informational purposes only and does not constitute legal or financial advice. Always consult a professional advisor for crypto-related tax and compliance matters in India.
