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Investment: Binance attracts Indian cryptocurrency users to trade with Rupees

Changpeng Zhao, Founder and Chief Executive Officer of Binance

*Binance, the largest cryptocurrency exchange in the world, holds the user’s cryptocurrency, and when the buyer and seller agree on a trade, the latter is given some time to move the money

Gbenga Kayode | ConsumerConnect

Binance, the largest cryptocurrency exchange in the world, has explored a strategy to draw Indian crypto traders to its platform by enabling them to settle deals in Rupees, the country’s national currency.

ConsumerConnect learnt the development in the virtual currency market in the country had made several Indian crypto punters to flock to Binance to trade, using Rupees.

Binance is allowing cryptocurrency users in the country to trade using their currency, either by online fund transfers from domestic bank accounts, or using services like GPay, or even the physical delivery of cash, ETtech report stated.

“Here’s a case where an overseas exchange is virtually matching local and offshore traders, though the payment is settled here in Rupees.

“Binance is simply acting as a neutral third party, providing a kind of an ‘escrow’ facility for the transfer of crypto assets,” report said.

Binance holds the user’s cryptocurrency, and when the buyer and seller agree on a trade, the latter is given some time to move the money.

Once the seller confirms, the assets are released.

Transactions breaching regulators’ rules?

The Binance transactions strategy is said to have attracted the attention of regulators in India.

Technically, though Binance may not be strictly breaking any Indian law, chances are that the local traders may be breaching rules on foreign exchange and money laundering, according to report.

As regards some deeper details of the transactions method, the local cryptocurrency and digital assets industry recently, shared a video with the Reserve Bank of India (RBI), demonstrating a crypto trade on Binance, using an Indian digital wallet to make the payment in Rupees.

The local crypto industry — stifled by high taxes and the absence of banking services fearing backlash from the RBI — hopes that the video would draw the regulator’s and the government’s attention to trades that mock the rules imposed by New Delhi and the central bank.

The video of the Binance trade was shared with RBI officials soon after the industry body Bharat Web3 Association requested the central bank to permit the resumption of UPI/payment services for the VDA (virtual digital asset) sector, report noted.

Meanwhile, a cryptocurrency trader was quoted to have submitted that “someone can sell crypto from a wallet opened with Binance. No one gets to know.

“No tax is paid, but trading goes on. Some of the trades are quite large.”

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