Coinspeaker
Binance Ends Cash Payment Option for P2P Crypto Trades in India
Leading cryptocurrency exchange Binance has ceased the use of cash payments for peer-to-peer (P2P) cryptocurrency transactions in India. Indian users are now unable to buy or sell supported cryptocurrencies using cash deposits or payments.
Binance P2P Users in India Lose Cash Payment Option
Previously, Binance permitted Indian traders to utilize an escrow service that allowed transactions to be completed after cash was received or directly deposited into bank accounts. This method enabled traders to operate discreetly, avoiding government scrutiny and heavy taxes. Despite other available options, the cash payment method has now been eliminated.
The likely reason behind this decision is compliance, ensuring the platform does not facilitate users in bypassing government regulations, including tax obligations. Additionally, some stakeholders have raised safety concerns regarding the cash option.
Purushottam Anand, founder of the crypto and blockchain law firm Crypto Legal, recently pointed out several issues. He noted that there are significant financial and physical risks involved.
“There have been instances where traders were physically assaulted and coerced into transferring their virtual assets or handing over cash during in-person meetings. Victims often hesitate to file criminal complaints due to regulatory uncertainty surrounding the legality of such transactions, especially if amounts exceed ₹2 lakh, making them easy targets for fraudsters,” he explained.
Binance’s move may indicate a desire to align with Indian government regulations, even though these trades do not technically violate local laws. The exchange acts as a third-party agent providing escrow services for cryptocurrency trades, which are not recognized as legal tender in India.
While Binance has stopped P2P cash payments in India, the option remains available in Dubai, where users can settle trades through direct AED cash deposits or exchanges. The Dubai government is more open to cryptocurrencies compared to India.
India’s Cryptocurrency Landscape
Binance’s decision could influence other crypto exchanges to follow suit and discontinue cash payments for P2P trades, potentially further hindering the cryptocurrency market in India.
Interestingly, India’s approach to cryptocurrencies appears divided among authorities. For example, the Securities and Exchange Board of India (SEBI) is interested in creating a framework that allows investors to engage in crypto trading within the country. According to internal documents, SEBI’s proposed framework suggests that digital assets should not be regulated by a single agency. SEBI believes that the Reserve Bank of India (RBI) should manage stablecoins and other fiat-backed cryptocurrencies, while SEBI would oversee various other assets.
Furthermore, SEBI wants the Pension Fund Regulatory and Development Authority (PFRDA) and the Insurance Regulatory and Development Authority of India (IRDAI) to regulate all pension-related cryptocurrencies.
Conversely, the RBI maintains that private cryptocurrencies should not be part of the financial market and seeks to ban stablecoins.
Binance Ends Cash Payment Option for P2P Crypto Trades in India
