As per RBI’s (Reserve Bank Of India) notice, the three months time given to banks to stop their all dealings with digital currencies (cryptocurrencies) ends on 5 July (Thursaday). The concluding exchanges in India are now working on a new platform called “OLX-Quikr Model” which is proposed to be based on peer to peer transfer protocol.
In this peer to peer model proposed, the users can trade in currencies or digital assets directly with each other without the intermediary banking channels for the purpose of actual transfers in rupee with any hassle.
During the announcement of RBI to ban all digital currencies, it was supposed that crypto currencies would loss their premium value in India, due to panic selling of the investors. However, it was seen that more fiat money deposits with exchanges were made to the exchanges than those who actually panicked and sold their crypto assets (bitcoin, ethereum, ripple etc) and withdrew their money. For now, the discount prices in India are all gone and the prices are in equilibrium with the international price. This all scenario gave the existing working exchanges in India confidence to come up with other alternatives very soon even before waiting for the courts final verdict.
A few exchange which started operating a few months before the courts order namely WazirX, Zebpay and UnoCoin have even started their peer to peer trading services for the investors introducing “Crypto Pairs.”
WazirX chief executive Nischal Shetty even said: “This initiative will groom crypto traders (investors) in India to convert their crypto assets to rupee and vice-versa when needed without any halt.”
On this peer to peer platform’s working, he said that the exchange would keep information of user’s willing to trade in digital currencies. The exchange will lock the assets if someone wants to sell; when a buyer comes, the information will be given to him and hence the further deal will proceed. Once the buyer transfers money to the seller by normal banking channels he wants, the exchange will release the currencies and transfer to the buyer. Money transfer will be between buyer and seller directly, the exchange being a interme intermediate facilitator as a service provider platform.
The crypto exchanges may even issue warnings to investors to withdraw cash ahead in future as per RBI ban taking effect. Most of them have introduced at least a dozen crypto pair for trading, promoting one over the other without involving the banking sector.
Though all of the exchanges are not proceeding with this ‘Plan B’, the peer to peer platform, as if RBI ban to take place in future. Zebpay, the largest exchange in India, is very confident on positive proposal by the court. Ajeet Khurana, chief executive of the Ahmedabad-based exchange fintech, said: “We believe the future of tokenisation and blockchain technology. It is our sole responsibility to convince the government that India should not be caught on the wrong side of history by missing this opportunity. As for now, for our Indian business, we have no Plan B.”
As for now, From Friday, any deposits of traders or sale proceeding from crypto-currencies such as bitcoin, ethereum and ripple etc cannot be transferred by the exchange back to a bank account and nor by investors to an exchange’s bank account. Banks will close such accounts of all exchanges. A sector official said in recent days, investors, especially smaller ones, had been seen selling and taking the money back but on another side other ones are still holding on to their digital assets.
There is a hearing in the Supreme Court on Tuesday, a day before the RBI window ends. Next week, a committee of secretaries, headed by the secretary, department of economic affairs, is to also finalise a report on policy in this regard.
Many investors say they are confident and largely stay invested. Meanwhile, we still hope that exchanges find some other legal route, so that no one is at risk.