Binance, the world’s biggest cryptocurrency exchange, is facilitating transactions for Indian traders in rupees by allowing fund transfers from local bank accounts or services like Google Pay and even accepting cash.
What does it mean? Per an Economic Times report, in this scenario, Binance operates like an overseas exchange, offering an “escrow service” that pairs a local buyer and seller in an offshore marketplace, while settling the payment in Indian rupees.
The report notes that while Indian regulators have taken note of these transactions, Binance isn’t technically breaking any laws — they don’t hold a rupee bank account and only act as a neutral third-party for the transfer of cryptocurrencies.
However, local traders using Binance could potentially be violating rules on exchange control and anti-money laundering.
How does it work? Binance’s peer-to-peer service offers a variety of payment options for buyers and sellers, including ‘cash deposit to bank’ and ‘cash in person.’ According to ET, local crypto players recently showed a video to the Reserve Bank of India (RBI) that depicted a crypto trade on Binance, with the payment completed via an India-based digital wallet.
Get Ring The Bell, Benzinga India’s weekly briefing. Designed specifically for investors like you.
The industry hopes to attract the attention of regulators and the government, highlighting trades that evade rules set by the central bank and the government.
It is worth noting that user activity on India-based exchanges fell 90% in 2022, with app downloads for a major local exchange dropping significantly. In contrast, downloads for a leading global crypto exchange platform saw a surge during the same period.
© 2023 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.