|May 11, 2018 02:36 PM||By: John Patrick Mullin | 2925 Views|
On April 6th, 2018, the Reserve Bank of India (RBI) stated that within 3 months entities registered with them should quit dealing with cryptocurrencies or companies that deal with cryptocurrencies.
This involves banks, mobile wallets, and domestic payment gateways. It was the first time any government entity published a rule that would affect cryptocurrency trading in India. There was no ban on trading Cryptocurrencies. Rather, not letting banks provide their services to exchanges gradually handicaps them because they will no longer be able to treat fiat payments.
To prevent a total abandonment of trading, Cryptocurrency exchanges have been rampantly adding crypto-to-crypto trading pairs which nevermore existed a few months ago.
Just last week, Zebpay, India’s largest Cryptocurrency exchange announced six new crypto-to-crypto trading pairs. These combine Ethereum, Bitcoin cash, and Ripple against BTC. Another favorite exchange, Unocoin published a new app where users would be able to trade popular cryptocurrencies against other cryptocurrencies.
Speaking with the Economic Times, Ajeet Khurana, the CEO of Zebpay said “Even if there were no RBI circular, the crypto to a crypto product would have happened. But, because of the circular and the fact that fiats may no running be in the picture, it did hurry up and encouraged the solution sooner.”
It is thought that India has over 5 Million active traders and this is only set to increase. As the government clamps under fiat trades, traders have moved to over the counter solutions like LocalBitcoin. Though India has a huge number of traders, it makes up fewer than 1% of daily volume.
Both traders and exchanges are not satisfied with RBI’s decision. 4 different exchanges (Coindelta, Koinex, ThroughBit, and CoinDCX) have moved to the Supreme Court next the RBI. Another exchange, CoinRecoil has shifted to the Delhi High Court, accusing RBI of violating the Constitution through the ban. The court has admitted this case and a notice has been published to the RBI for a hearing on May 24th, 2018.