Binance Ceases Cash Transactions For Peer-To-Peer Trading In India

Binance, the biggest cryptocurrency exchange in the world by market capitalization, suspended cash transactions in India for peer-to-peer (P2P) trades. This change affects traders who use the rupee’ cash choice’ to avoid tax rules. Currently, cryptocurrency traders in India can’t make ‘cash transactions’ on Binance.

Binance Pauses P2P Trades In India But Allows Non-Cash Payment Methods In Rupees

Until recently, local bettors could utilize the ‘secure payment’ service provided by the foreign exchange. They used it to place a buy or sell order on the platform and complete a transaction by paying in rupees.

In addition to usual payment methods like online transfers or UPI, traders could finalize a trade by physically delivering cash or depositing it in a bank account.

Now, Binance has ceased providing the ‘cash option’ in rupees for these ‘peer-to-peer’ (P2P) trades. Nevertheless, conventional non-cash payment methods in rupees remain accessible.

The Founder of Crypto Legal, Purushottam Anand, said P2P cash transactions, with or without the involvement of any exchange, expose parties to severe physical and financial risk. Crypto Legal is a Bengaluru-based blockchain and crypto-focused law firm.

The Founder of Crypto Legal, Purushottam Anand, said P2P cash transactions put parties at significant physical and financial risk, whether they involve any exchange or not.

Anand shared that there are incidents where traders were attacked and pressured to transfer their virtual assets or give cash during face-to-face meetings. Victims are reluctant to report crimes because of uncertainty about whether such cash transactions, particularly those involving more than ₹2 lakh, are legal. Fraudsters take advantage of this fear.

Interestingly, the option to use cash in Dirham remains. This allows Binance to connect a buyer and sellers in Dubai and enable them to pay in AED cash.

The Exchange Continues To Offer Its Peer-To-Peer Services In The United Arab Emirates

Traders said cash and cryptocurrencies can be easily exchanged in the United Arab Emirates, with Dubai slowly becoming the new center for cryptocurrencies. Additionally, some developers have begun accepting payments in cryptocurrencies.

Indians in the country traded on Binance with cash transactions, navigating uncertain foreign exchange regulations and potentially avoiding taxes. However, the exchange itself wasn’t technically violating Indian laws.

Binance served as a middleman offering escrow services for transferring cryptocurrencies, which are not recognized as legal tender in India. In these peer-to-peer trades, Binance holds onto the cryptocurrencies and releases them when the seller confirms receiving the payment.

India’s position in the cryptocurrency industry has yet to be discovered. Traders in the country are still determining about venturing into digital assets. The country has not implemented regulations, preventing a proposed cryptocurrency bill since three years ago.

With more than 19 million cryptocurrency investors and increasing interest, India offers opportunities and difficulties for cryptocurrency exchanges.