As banks offer unreliable financial services to crypto exchanges, Indian crypto investors now rely on peer-to-peer (P2P) transfer, spot trading, and WhatsApp or Telegram groups to conduct cryptocurrency transactions.
Recently, SBI recently restricted the ability of crypto exchanges to use its UPI network to receive cash.
Most major exchanges have seen a spike in purchasing activity in the past few weeks. However, 60 to 80% of all transactions currently taking place are using new techniques developed by crypto exchanges. As published earlier by Cryptoknowmics, India seems to follow Nigeria in crypto adoption using peer-to-peer technology.
According to industry watchers, P2P crypto exchanges have witnessed an increase in alternative ways such as spot trading, direct buy and sell, selling and purchasing through WhatsApp/Telegram groups, and direct buying through common acquaintances.
Now, these techniques account for over 80% of all exchange transactions, up from roughly 15% a year earlier.
"In India, P2P marketplace is used by over 90% of customers who switch from fiat money. For the advanced trading capabilities, many customers choose to deposit their Bitcoin directly on the OKEx platform," said Jay Hao, CEO of the cryptocurrency exchange.
Most crypto exchanges now provide a P2P option where purchasers may directly swap fiat money for cryptocurrency from another user.
“Instead of being a trading platform, P2P is an on-ramp for fiat to crypto conversions. P2P would be used by those who have no other way of converting their fiat currency to crypto (USDT) during the banking embargo.
Since the Supreme Court lifted the banking prohibition, most customers choose to utilize banking instead of P2P to deposit or withdraw INR from WazirX," said Nischal Shetty, CEO of WazirX, another cryptocurrency exchange.
On August 31, the highest court has overturned the Reserve Bank of India's 2018 circular on cryptocurrencies, which barred banks from trading in virtual currencies.
As a result, several exchanges are offering Systematic Investment Plan (SIP) products and funds. This allows users to spend a predetermined amount each month to acquire a small portfolio of cryptos.
“Investors may receive income up to 1800% in a five-year SIP plan which is unparalleled by any other asset class in the world,” stated Shivam Thakral, CEO of BuyUcoin.