Crypto Bourses Try P2P deals, Direct Deposits

Several cryptocurrency exchanges are facilitating peer-to-peer (P2P) deals while some platforms are directly accepting deposits from coin buyers to overcome the curbs imposed by banks and payment companies amid the Reserve Bank of India (RBI) voicing its reservations on these virtual digital assets. In P2P transactions, the exchange, after receiving an order from a buyer, shares the seller’s bank accounts details with the buyer. The buyer then directly transfers funds to the seller using any of the regular online payment options while the seller moves the cryptocurrency lying in her wallet with the exchange to the buyer’s crypto wallet. The exchange simply connects the buyer and seller but the money does not flow through the exchange – unlike in any modern bourse running a faceless order matching software engine in executing orders and settling trades. “This is not how an exchange should be functioning. It’s certainly less efficient. But apparently there is no violation of any regulations 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 told ET requesting anonymity. Alternatively, some of the exchanges have chosen a different mode – receiving funds directly in their current account from crypto buyers. Once the money is remitted, the amount is credited to the trade’s account with the exchange, which can then be used to purchase cryptos. The current account is typically in the name of the software solution to the crypto exchange. A leading exchange has such an accounts with one of the largest private sector banks. Till recently, exchanges were operating differently.   S-ET

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