Image Source: Binance
Binance, the world’s largest cryptocurrency exchange by market capitalization, has been gaining popularity among traders in India. The exchange allows users to buy and sell cryptocurrencies using Indian rupees. Fund transfers can be made through local bank accounts, services like Google Pay, or even cash payments.
Binance acts as a neutral third party, providing an ‘escrow service’ that connects local buyers and sellers in an offshore marketplace while settling the payment in Indian rupees (INR), as reported by the Economic Times.
According to the report, Indian regulators are aware of these transactions. Binance is not violating any laws because they do not hold a rupee bank account. They merely provide escrow services for crypto transfers, which are not recognized as legal tender. Nevertheless, it is crucial to acknowledge that indigenous traders promoting the purchase and sale of cryptocurrencies through the Binance platform could potentially be infringing upon exchange control regulations and anti-money laundering protocols.
According to a cryptocurrency trader, an individual can vend their cryptocurrency from their Binance wallet to a buyer in India, who, in turn, receives the cryptocurrency in their own Binance wallet and settles the payment in rupees.
This method facilitates clandestine trades, bypassing taxation. Certain transactions of this nature involve significant sums of money. It is of utmost importance to carefully contemplate the potential repercussions of such transactions concerning the evasion of taxes and the facilitation of money laundering.
Binance’s peer-to-peer service in India offers various payment options for Indian traders, including UPI, IMPS, Google Pay, cash deposits to banks, and in-person cash transactions. To advocate for the crypto industry, the Bharat Web3 Association, a newly formed crypto policy advocacy group in India, shared a video with the Reserve Bank of India, showcasing a crypto trade on Binance using an India-based digital wallet.
The video was presented after the association separately requested the government to allow crypto firms access to the national Unified Payments Interface (UPI), which was banned the previous year. Moreover, many Indians have transferred their cryptocurrencies to wallets provided by foreign exchanges.
This shift has resulted in a significant decrease in user activity on India-based exchanges, with a reported decline of up to 90% in 2022. A research study conducted by Esya Centre, a technology policy think tank based in New Delhi, revealed that Indians moved over $3.8 billion in trading volume from local to international crypto exchanges following the announcement of strict crypto tax rules in the country.
Binance has emerged as a popular choice for Indian traders looking to engage in cryptocurrency trading using Indian rupees. While Binance itself complies with existing regulations, there are concerns regarding potential violations of exchange control rules and anti-money laundering measures by local traders. The impact of Binance’s services on the Indian crypto industry has led to increased efforts by crypto advocacy groups to promote a more favorable regulatory environment. Additionally, many Indians have opted to trade on foreign exchanges due to the stricter tax rules in the country. The future of cryptocurrency trading in India remains uncertain as regulators and industry stakeholders continue to navigate the evolving landscape.
Ken Emmanuel is a Blockchain Content writer, a Web3 Enthusiast and a Social Media Management Strategist, he likes writing educative contents to help people gain more knowledge and get inspired. The growth of any organization he work with is always his priority. He is a Geographer by profession and loves reading.
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Image Source: Binance