Even as the Reserve Bank of India (RBI) deadline is poised to ban cryptocurrencies in India from 5th of July, panic is driving many individuals to assume cryptocurrencies are gone for good from India. However, Indian crypto platforms WazirX and Koinex claim to have found a legal solution to skirt the banks while transacting in crypto, namely P2P crypto trading.
For the ignorant, P2P is ‘peer-to-peer’ exchange of data, in which, computing or networking is a distributed application architecture that partitions tasks or workloads between peers. This means cryptocurrency enthusiasts will be able to transact without involving the services of banks.
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Calling the system a ‘glimpse into the decentralized future’, Nischal Shetty, CEO of WazirX said that with the help of P2P transfer, people can trade in crypto directly with INR.
Shetty explained that WazirX would act as an escrow account to retain the cryptos while transacting, so that none of the parties can cheat. WazirX would connect INR-based buyers with similar sellers. It would only release the crypto to the buyer when the seller confirms the receipt of INR.
WazirX also claims to check KYC details of users and keep a record of every transaction happening on their exchange. They are also building a Dispute Resolution engine for any grievances that may come up.
“P2P is perhaps, the safest and most legal way to cash in/cash out of cryptos in India. Once you cash in, you can trade in crypto-pairs like a boss, then cash out with ease,” Shetty said.
WazirX plans to go live with P2P as soon as the RBI ban comes into effect, which is 5th of July. Currently, WazirX, which was launched in March, supports 37 trading cryptocurrencies against INR and 17 BTC trading pairs.
So far, five petitions have been filed against the RBI ban in the courts. The hearings for all cases except one are due for 20th July. The petition by Internet & Mobile Association of India (IAMAI) will be heard on 3rd of July, which the Supreme Court considered urgent. WazirX, along with Unocoin and Zebpay, are a part of this association.
Koinex has also launched a Peer-to-Peer network for digital assets transactions using fiat currency, which they call Loop. Calling Koinex Loop “a legitimate alternative so as to safeguard and protect our users against the crooked and suspicious transaction mechanisms available for exchange of digital assets,” Rahul Raj, Co-founder of Koinex said that users will use Loop to buy and sell digital assets with INR without any network and transaction fees, making micro trades possible.
Like WazirX P2P exchange, Loop offers a KYC-verified, blockchain-based collateralized escrow. Koinex also claims that in spite of direct transactions between buyer and seller, no private and sensitive information, including identity will be revealed. Similar to WazirX’ Dispute Resolution engine, Koinex offers a technology-enabled dispute resolution mechanism.
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“Combining the principles of decentralization, trust, security, data privacy and ease-of-use, Loop will complete the full circle for digital assets trading in India,” Raj said.
Packaged directly in with the Koinex web platform and the mobile app, current Koinex users will have automatic access to the P2P exchange network. Users can also refer family and friends.
“In conjunction with the Crypto/Crypto trading corridors on Koinex, the Peer-to-Peer transaction network will allow all users to exchange their fiat currency into a digital asset and vice versa without compromising on the seamless experience that they are used to. We have worked out the mathematics and economics to create a perfect blend of transaction and trade,” Raj said.