Located a few hundred metres from the Rajasthan State Legislative Assembly in Jaipur, the offices of United Multistate Credit Cooperative Society appear to be a relic forgotten by time. The slim corridor leading to the society is flanked by scooters and motorcycles on both sides. Dust and debris are everywhere, almost as if they were long-time tenants.
United, however, isn’t ready to recede into the pages of history just yet. It has hitched its wagon to cryptocurrency in a bid to stay relevant (and solvent) in a fast-changing world.
The first signs of this can be seen as one walks up the stairs to the office. There, a grinning image of Bill Gates greets visitors. Splashed across the picture, in garish orange text, is a quote from Gates praising bitcoin—the decentralised digital currency that has become synonymous with crypto.
United’s tryst with cryptocurrency is opportunistic, to be sure. Started in 2012, it was largely focussed on serving small- and medium-sized enterprises (SMEs) in towns and villages, farmers, and those in need of microfinance loans to buy things like sewing machines.
The society was cruising along till 2019, with deposits of Rs 580 crore (US$77.5 million) flowing through its coffers. Major frauds at other cooperative societies cooperative societies Hindustan Times Adarsh co-op scam: 11 arrested for siphoning ₹1400 cr Read more , however, eroded faith among its depositors.
Around June 2019, said United founder and CEO Dinesh Kukreja, the society received around Rs 3 crore (US$400,000) each month towards repayment of loans. With sentiment in cooperative societies souring, though, depositors turned up in droves, seeking to withdraw as much as Rs 10 crore (US$1.3 million). “We couldn’t service those requests, which created more panic,” Kukreja told The Ken.
Covid made things worse. Borrowers could no longer repay their loans, meaning no money was coming in. “Till date, we have about Rs 80 crore (US$10.7 million) worth of loans pending repayment in the market,” said Kukreja.
In desperate need of a solution, Kukreja got creative. Crypto-assets such as bitcoin and ether were on a renewed rally after a quiet couple of years. Between March and October 2020, bitcoin’s price shot up from around US$5,000 a unit to US$10,000. “Maybe this (crypto) will save us, and help us build back the business,” Kukreja recalled thinking at the time.
Since United lacked both the tech know-how and capital to execute a pivot to crypto, Kukreja approached Kumar Gaurav, founder of UK-based crypto firm Cashaa. Gaurav offered both Cashaa’s financing and tech chops in exchange for a 51% stake in the new venture, Unicas.
