In the meantime, those cryptocurrencies that have tried to keep their doors open in the wake of this uncertainty have been forced to adopt a more peer-to-peer based business model as they await the hearing in the Supreme Court.
“If banking is something the exchanges are not allowed to do, then the solution is something that direct banking doesn’t come in,” said Nischal Shetty, chief executive of WazirX.
The change for these exchanges sees them now operating more as an escrow account than a traditional exchange, holding the cryptocurrencies while the parties make the exchange in coins.
“We built an escrow system, where before you sell one Bitcoin, you (A) deposit the Bitcoin to our escrow for safekeeping. Once the buyer (B) pays rupees to you (A), WazirX releases the crypto to the buyer (B), after getting a confirmation from you (A),” said Shetty.
July 5 deadline
The application to the courts is cutting it very fine as the RBI had stated that it’s grace period for businesses to stop operating with cryptocurrencies was July 5.
“The court could allow the plea application and stop the RBI directive in which case banks can continue to offer services to exchanges until July 20,” said Mohammed Danish, advocate and crypto analyst.