India, second most populated country of the world, is the sixth largest economy in the world with a nominal GDP of $2.45 trillion. When one concerns for the future of cryptocurrencies, there is no way to rule out India for impacting the Crypto world. In past, supreme court of India delayed the decision related to strict ban on cryptocurrencies till September, whereas on the other side, finance ministry announced for devising a framework for regulating cryptocurrencies in India. While the ban still acted solely on cryptocurrencies till the final verdict by supreme court, crypto traders have found numerous smart ways to carry out trade, bypassing the ban.
Traders have been using ‘Dabba’ trading nowadays to use ‘Halwa’ network for transferring money. The practice of dabba trade has safeguarded the interests of crypto traders by providing a platform other Indian commodity or stock exchange. In this type of trading, broker uses overseas trading banks to trade cryptocurrencies and execute payments. Most of these banks are concentrated in countries like UK and Dubai. As all the banks and exchanges in India are prohibited to do any activity related to cryptocurrencies, people reached out to international banks without breaking any law laid by Indian government.
The transactions that are being made points to the fact that most brokers accepted cash from their customers and then used foreign means to buy bitcoins. After some period of time, the bitcoins bought were released and cash difference was returned to customer in cash. The article quoted:
Most of the traders are based out of Ahmedabad, Surat, Rajkot, Kolkata and Mumbai. They work as a bridge between a customer and foreign trading company. The broker accepts money in cash, buys bitcoins using an overseas trading account and sells them when the bet placed in India is settled. The difference is paid in cash to the customer.
Transactions throughout the process are achieved by using Halwa network which is actually an honor system. Honor system does not have strictly enforced rules governing its principles and is safe to be used for exchanging funds internationally as it is not bound by the laws of country it operates in. That’s the gain used by Indians to exploit their aims of dealing cryptocurrencies without getting accountable for any type of illegal activity. The app called ‘Telegram’ is used by traders to deal via ‘halwa’ network and the money is paid in cash or through cheque to the investor or commission deduction:
Besides dabba trade gushing, many other companies have started working on peer to peer solutions to ease crypto trade in India. According to a news source, Wazirx, Koinex and Coindelta will be establishing Peer to peer network for crypto trading. Regarding Koinex loop service the Koinex exchange explained its model by saying:
Loop is a peer-to-peer transaction network for digital assets using fiat currency. Koinex users will automatically find their KYC-verified Loop accounts ready upon release.
Along with Peer to peer model, many other companies such as Zebpay and Unocoin have offered a crypto to crypto model for easing crypto trade. Zebpay is offering about 19 cryptocurrencies and Unocoin has been dealing 17 trading pairs through Unodax. As Unodax confirmed it by saiyng:
Unodax, India’s leading blockchain and cryptoasset company is introducing 17 crypto-to-crypto trading pairs.
Earlier in June 2018, senior vice president of Ripple, Asheesh Birla, termed India as the fastest growing outward remittance. This concludes to the fact that although ban was introduced to prevent these activities, many companies have worked out their way to provide a way beneath the ground to the crypto traders in India to operate as freely as they wish to. This leads to another fact that people in country are interested in cryptocurrency and have inclination towards it to such a extent that companies have launched peer to peer models or crypto to crypto models under the belt to address the market existing in India. I think that with these circumstances the final verdict only decides that whether these crypto dealings can come out in light or not because the although banned at the moment, people have found ways to bypass it.