Local Crypto Exchanges are Circumventing India’s New Bitcoin Ban: Here’s How
India Bitcoin
According to Coindelta co-founder Shubham Yadav, cryptocurrency exchanges in India can no longer process fiat-to-crypto trades and have shifted their business model to crypto-to-crypto trading.
Central Bank’s Ban on Crypto Stands
In April, CCN reported that the Reserve Bank of India, the country’s central bank, first imposed its ban on cryptocurrency trading, effectively disallowing local banks from providing banking services to crypto exchanges. On July 3, the Supreme Court of India refused to lift RBI’s cryptocurrency trading ban, reaffirming that banks cannot deal with cryptocurrency exchanges in India.
While the Supreme Court of India is expected to conduct a hearing to consider the case of the cryptocurrency industry against the RBI’s ban, until the court officially reverses the existing ban cryptocurrency trading, local exchanges will not be able to support fiat-to-crypto trades.
In an interview with Quartz, Yadav, the founder of a local cryptocurrency trading platform Coindelta, said that local exchanges have moved on from fiat-to-cryptocurrency trades to crypto-only trades, and are currently competing against major exchanges like Binance.
Consequently, for investors in India to trade digital assets, they are required to rely on peer-to-peer platforms like LocalBitcoins to acquire bitcoin first and then trade other cryptocurrencies on crypto-only exchanges.
Yadav expressed his concerns over the dependence on peer-to-peer marketplaces and the danger of using such platforms that have unknown investors and individuals.
“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,” Yadav said.