Amid a hostile environment and regulatory uproar for cryptocurrencies like Bitcoin BTC/USD, Dogecoin DOGE/USD and Shiba Inu SHIB/USD in India, several cryptocurrency exchanges are using peer-to-peer deals and direct deposits to overcome payment curbs imposed by the central bank according to the Economic Times.
In a peer-to-peer transaction, after receiving an order from a buyer, the cryptocurrency exchange shares the seller’s account details with them. The buyer directly sends the funds to the seller’s account and the seller then moves the cryptocurrency from their wallet with the exchange to the buyer’s wallet.
This came after India’s central bank’s unit National Payments Corporation of India, which governs the use of UPI in India, disassociated itself from the exchanges using its services to buy digital assets.
“This is not how an exchange should be functioning. It’s certainly less efficient. But apparently, there is no violation of any regulation or law. It’s a simple money transfer from A to B over net banking or IMPS or NEFT, and it’s happening outside the exchange,” an official with one of the exchanges requesting anonymity told ET.
Besides the payment hurdle, the cryptocurrency community has been imposed with taxes, including a 30% tax on profits from digital assets that came into force on April 1 and a 1% tax-deducted-at-source that will come into effect on July 1.
The regulatory uproar has sent many big-ticket cryptocurrency traders to switch to exchanges overseas. The government has been long mulling, bringing in a law to either regulate or tighten the use of digital assets in the country.
Price Action: According to data from Benzinga Pro, Bitcoin was trading at $38,940, losing 1.88% in the last 24 hours, and Ethereum was trading at $2,908, down 2.69% over the same period.
