[2018-07-05] Crypto Exchanges Are Already Adapting to India's Bank Account Ban

[ivanpoldark]

As the Indian Supreme Court declined to end a circular issued by the country's central bank that bars crypto exchanges from working with banks, trading platforms are taking varied actions ahead of the next court hearing set for July 20.

Zebpay, the largest crypto exchange in India by trading volume, said in a Tweet on Wednesday it had paused the Indian rupee deposit and withdrawal services until banks allow it again following the Supreme Court's decision earlier this week.

As previously reported by CoinDesk, the Supreme Court held a hearing on Tuesday and said the Reserve Bank of India's (RBI) circular issued in April will "remain implemented," which prohibits banks from facilitating fiat transactions on Indian crypto exchanges.

However, Zebpay said the fiat-to-crypto and crypto-to-crypto trading services are still on. According to data from CoinMarketCap, Zebpay is seeing over $5 million trading volume in the past 24 hours.

While the company has not made further notes on the court's temporary decision, Ajeet Khurana, chief executive of Zebpay, commented in a Tweet:

"Am very sad! But we will continue our relentless efforts to get things sorted. I am sure crypto is good for India. If we, as a nation, do not make up our mind, we will be caught on the wrong side of history and miss the crypto bus. And that will be a tragedy."

In a similar move, several exchanges in India with relatively smaller volume also announced they would suspend fiat currency deposit and withdrawal services for now, such as Coinome and Pexo.

Meanwhile, other exchanges appear to be not deterred and said they will continue allowing investors to deposit and withdraw fiat currency even if the RBI's circular indicated July 5 as the deadline for bank account closure.

For instance, BitBNS, an exchange with over $1.4 million 24-hour trading volume on CoinMarketCap, confirmed on Twitter on Tuesday it will continue the service for depositing and withdrawing Indian rupee after July 5.

The exchange has not responded to CoinDesk's enquiry for further details. Similarly, another smaller exchange named KoinOK also claimed its fiat currency deposit and withdrawal services are running fine.

On the other hand, shifting to over-the-counter trading has also become one strategy that several Indian exchanges are taking to circumvent the RBI's bank account curb.

KoinEX, an exchange with around $1.5 million 24-hour trading volume according to CoinMarketCap, has collaborated with another platform called WazirX to launched a peer-to-peer trading service dubbed KoinLoop, based on a local news report on Tuesday.

The service is seen as a way to cut the exchange's direct ties with banks so that investors can buy or sell cryptocurrency assets in a peer-to-peer manner.

"If banking is something the exchanges are not allowed to do, then the solution is something that direct banking doesn't come in," WazirX's chief executive Nischal Shetty was quoted as saying.

https://www.coindesk.com/crypto-exchanges-are-already-adapting-to-indias-bank-account-ban/

[buwaytress]

That last quote is just the start of it all. If the state wants to lose money from being excluded in what surely is going to become a dominant currency, then that's their prerogative. This is a good thing, then people will realise how much they have to lose by using money they have no control over. Maybe this will also spur more "proper" adoption in India where people accept Bitcoin as payments, as salary, etc. therefore no longer requiring the rupee.

Even in Iran where the state is in active censure of Bitcoin, people still can find a way. That's the beauty of Bitcoin.

[Theb]

So the bottom line is online transfers are out but over-the-counter deposits are in? It seems like a tedious process as their alternative. Not to mention that it is a manual process meaning that they will need to undergo several withdrawal requests and each time they need to process it manually by going directly to bank, as the withdrawal request flood them they will soon need help for additional manpower for such thing. I don't know  how they will maintain to operate such thing but it sure does the trick as most deposits of money via over-the-counter is not mostly profiled by the banks.

[acheampong64]

That's some sad news coming all the way from India. Anyways i learnt the RBI had issue a warning to everyone prior to this and they gave them some time to cash out if they had any money. By the way what's the point in allowing trading if you can't deposit/withdrawal. I hope the new alternative created by the collaborated platforms will help sustain them for now.