As the things not going well for cryptocurrency exchanges in India as the apex court i.e Supreme court of India denied interim relief on April circular of Reserve Bank of India. Reserve bank in its April circular told all bank and financial institutions not to facilitate any transactions related to cryptocurrencies and given a period of three months to stop all transactions.
But crypto enthusiasts who still want to trade found another way to trade and i.e peer to peer transfers or crypto to crypto transfer to continue their trading.
“Nischal Shetty, founder, and CEO of WazirX, told that anticipating the withdrawal of banking services, his exchange had already begun working on an alternative model for entry and exit from cryptocurrency trading a week back.”
In peer to peer model, no bank account is needed, and trade happens directly between the exchanges so the exchanges are solely responsible for the transaction of cryptocurrencies in this model.
This model definitely works for those who still wanted to trade in cryptocurrencies even after the hindrance of bank services. Here one doesn’t need ‘cash in and cash out’ through bank services infact one transfer his or her money to the seller directly through fintech unified payment interface (FT UPI) so when buyer confirms his transaction and seller confirm his transaction then wallet of cryptocurrency exchange comes into picture and finally exchange update the wallet.
“Through a bank account, it used to take five minutes to 10 minutes for an entry into or exit from cryptocurrencies. It may now take an hour or two or maybe less depending on the demand and supply. If you look at it in perspective, it still is faster than you cashing in and out of equity market today; which takes longer. It takes a day or two for the money to reach your bank or for you to take delivery of your assets (in stocks),” said Shetty.
Supreme courts deniel to grant relief obstructed the banks and financial institutions under the Reserve Bank of India to transact in cryptocurrencies will now seems to be a’ minor bump on road’. As to stop trading in cryptocurrencies may not seems to be successful now as other options comes in picture.
Inspite Rserve Bank of India said that it didn’t done any research on cryptocurrencies and still banning it is not seems a good gesture from a reputable institution like RBI, but the government of India’s stand of not recognizing cryptocurrencies as legal tender and stopping financial crime may be the reason for this. As, government of india also refused giving “PETRO” in exchange of oil on discounted rate.