Recently, Paytm payments bank joined the constantly growing list of financial institutions that are distancing themselves from cryptocurrency exchanges like Wazir X, Coin DCX, ZebPay, and more. With YES Bank and ICICI already disassociating themselves from these exchanges, Indian investors are increasingly left with negligible payment and deposit choices when it comes to cryptocurrency-related transactions.
Adding to the growing unwillingness of various banking institutions to facilitate cryptocurrency transactions in the country is its grey and vague regulatory landscape. And even though the government is opting for a “calibrated” approach towards adopting cryptocurrency, which can only mean green shoots for the nascent Indian crypto industry, most prominent exchanges like Wazir X and Coin DCX are yet to offer the widely used UPI (Unified Payment Interface) as a payment option for adding money to wallets for trading in bitcoin, dogecoin, ethereum and more.
Interestingly, the National Payments Corporation, which runs the UPI system has not weighed in on banning cryptocurrencies. However, that does nothing to reduce the transactional issues faced by Wazir X, Coin DCX, and more.
According to a statement by Coin DCX, the exchange currently has only two fully functional modes of payment at present that are utilised to accept INR Deposits. The exchange is constantly working to add more channels as soon as possible.
Think of this P2P mechanism as simply a smart virtual marketplace, where you are matched with the right buyer or seller, depending on your requirements. The process is simple. Say you want to buy 200 USDT. You punch in the figure and the platform will connect you with sellers who are looking to trade at that moment. While the transaction is in process, the USDT is kept safely in an escrow account to prevent fraud. Once both parties agree on the terms and proceed with the transaction, the money is sent to the recipient party.
You are also allotted a unique XID on the WazirX platform, which allows you to continue trading with buyers and is shareable with other traders as well. However, the P2P mechanism has its own limitations, given that there is no guarantee of buyers or sellers being immediately available when you want, which can stop you from optimising the transaction and gain maximum profit. This is why there is a dire need to have a variety of functional payment platforms for the exchanges to trade up to their full potential.