How Cryptocurrency Exchanges Are Circumventing Cryptocurrency Ban In India
BTC Wires: The hot news around the block is that cryptocurrency exchanges are circumventing the cryptocurrency ban set in place by the Reserve Bank of India (RBI). In April this year, RBI issued a directive stating that July 5 onwards, no businesses or individuals were to deal in any kind of virtual currency.
Since the termination of the deadline three days ago, several Indian cryptocurrency exchanges such as Koinex Loop and WazirX are resorting to something that they call the “peer-to-peer model” so that they can continue facilitating their trade of the digital currency without being dependent on the standard banking channels. This is a direct circumvention of the circular issued by RBI three months ago.
This attempt of essentially reinventing their businesses on the part of Indian cryptocurrency platforms has raised many eyebrows around the country. Even though this sidestepping of the ban allows them to stay in business, it significantly
reduces their customer pool since they are merely restricted to the business of their investors now. Shubham Yadav, Co-founder of Coindelta, an Indian cryptocurrency exchange commented to this effect, “Earlier, a lot of these transactions were taken offline and completed, which led to a possibility of being robbed. Or even when it was online, you didn’t know who you were dealing with, and there were chances that the deal could go awry.”
Nischal Shetty, the CEO of WazirX, another Indian cryptocurrency platform went on to introduce the P2P model selling the idea but stating, ” In the P2P model, the buyer and seller can deal with each other directly while WazirX acts as an escrow account for holding the cryptos during the transaction so that neither party cheats the other.” He also shared his belief in this P2P transfer system, saying that it would work.
The Ministry of Finance and RBI have clearly stated that all these virtual currencies ARE NOT legal tender and hence, cannot be considered as currencies. However, the attempts at the parts of these cryptocurrency platforms in India can definitely be appreciated as they come up with innovative methods to continue their trade without directly breaking the law.