Indians continue buying cryptos via P2P and other methods even after UPI halt

Though most top exchanges saw a surge in buying activity in the last few weeks, as much as 60–80% of all transactions are now happening through some of the new methods introduced by the crypto exchanges.

Indian crypto investors are now opting for peer-to-peer transfers, spot trading and WhatsApp or Telegram groups to trade currencies due to unpredictable banking services being offered to exchanges by the banks.

Recently, SBI blocked the receipt of funds by crypto bourses on its UPI platform.

Though most top exchanges saw a surge in buying activity in the last few weeks, as much as 60–80% of all transactions are now happening through some of the new methods introduced by the crypto exchanges.

Industry trackers say P2P crypto exchanges have seen a spurt in other methods such as spot trading, direct buy- and-sell, selling and buying through WhatsApp/Telegram groups and direct buying through mutual friends.

These methods now account for almost 80% of all transactions on exchanges, up from about 10–15% a year ago.

“In India more than 90% of the users who come onboard from fiat currency use P2P marketplace. A large chunk of users also prefers to directly deposit their cryptocurrency on the OKEx platform to make use of the advanced trading features,” said Jay Hao, CEO of cryptocurrency exchange OKEx.com.

P2P is an option that is now offered by most crypto exchanges where buyers can directly exchange fiat money against cryptocurrency from another individual.

P2P is not a way to trade crypto, but instead, it’s a fiat to crypto on-ramp solution. In the absence of banking options during the banking ban, people would use P2P to convert their fiat to crypto (USDT) and vice-versa. Ever since the banking ban has been struck down by the Supreme Court, most users prefer banking to P2P to deposit/withdraw INR from WazirX,” said Nischal Shetty, CEO WazirX, another cryptocurrency exchange.

Some of the exchanges claim that several other banks are continuing to offer services.

A recent Reserve Bank of India missive cited that banks cannot use its 2018 circular on cryptocurrencies that prohibited any dealing in virtual currencies, as it was struck down by the apex court, ET wrote on August 31.

Many of the exchanges are so buoyant that they are floating Systematic Investment Plan (SIP) products and funds where customers can invest every month to buy a handful of crypto assets.

“Investors can earn interest up to 1800% in a 5-year SIP plan which is unmatched by any other asset class in the world,” said Shivam Thakral, CEO of BuyUcoin.

Bitcoin has become one of the buzzwords in the market that has gained traction ever since this virtual currency touched an all-time high in April this year. This biggest virtual currency hogged the space after Tesla’s CEO Elon Musk made a statement, “That he himself owns cryptocurrency ranging from Bitcoin, Ethereum, Dagecoin.” This statement led to a sharp rally in cryptocurrencies, so much so, that Bitcoin touched an all-time high at $65,000 mark. This investment avenue is being discussed across the world, but the more it rally’s the more it leaves keen investors in lurch, who are struggling to understand the intricacies of the cryptocurrencies like How can we buy it? Is it a safe avenue for investment?

People who are keen to buy Bitcoins should go to bitcoin exchanges. There are many platforms in India where one can buy cryptocurrency from exchanges like Coinbase and Coindesk. But in India, one can buy Bitcoins from ZebPay. For buying Bitcoins, one can do a transfer from your bank account into ZebPay. You are required to undergo a basic KYC before you start trading in Bitcoins. You can get your KYC done after submitting Aadhaar card, Pan Card or any other document.

After placing an order, you can purchase Bitcoin using digital payment methods. Money from your bank accounts can be transferred using NEFT, RTGS, debit or credit card. Currently the Bitcoin is of $48000 but this does not mean that you will have to buy a Bitcoin, in fact you can invest in Bitcoin starting from Rs 500.

State Bank of India, India’s largest lender, has blocked crypto exchanges from receiving funds via its UPI platform and has asked payment processors to disable SBI UPI on their platforms as well.

SBI’s decision comes after a slew of banks imposed similar bans on crypto exchanges over the last few months. HDFC Bank, in May, had warned investors against dealing in virtual currencies, including bitcoin, and said that failure to heed the advisory may lead to the cancellation of their cards and restrictions of transactions.

A media report stated that ICICI Bank informed a few payment gateways to shut off its net banking services for merchants who were buying or selling cryptocurrencies. The Quint, quoting anonymous industry experts, said other large banks were likely to follow suit.

Traders are now using e-wallet services to continue transacting on crypto trading platforms, but paying wallet charges and dealing with limits on fund transfers have been putting people off.

The Reserve Bank of India has been quite vocal about its reservations on virtual currencies. Governor Shaktikanta Das recently said the central bank had conveyed to the government its “serious and major” concerns around crypto and its financial stability.

For crypto investors and enthusiasts, his comments come at an inopportune time with the Union Cabinet just weeks away from taking up a bill to regulate virtual currencies and their fledgling market in India.

Finance Minister Nirmala Sitharaman earlier indicated that the government was not considering clamping down too hard on crypto, and that interested investors would be given adequate opportunities to experiment with digital currencies.

India has nearly 1.5 crore investors who hold crypto worth Rs 15,000 crore — and an increasing number of people are looking to get into the space, especially following the bitcoin price rally over the last year. Nearly 350 Indian startups are operating in the cryptocurrency field, and its related blockchain space.

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