WazirX, an Indian cryptocurrency exchange, has launched an INR – USD Tether [USDT] pairing available for trading. This comes in the light of the ban on cryptocurrencies in India by the Reserve Bank of India.
The exchange also added a peer-to-peer [P2P] transfer feature for its users in order to circumvent the ban, as only banks are restricted from transacting with cryptocurrency exchange platforms. A peer-to-peer solution allows for the direct transfer of funds between the buyer and seller.
WazirX has implemented an escrow system that ensures security for the user. In an interview with AMBCrypto, Nischal Shetty, the CEO of WazirX, said:
“Trust is ensured through our escrow system. There is no room for fraud in the P2P system, as we escrow the crypto and the money. If the seller does not deliver, your money will be safe. If the buyer does not deliver, your crypto will stay with you.”
An escrow is an arrangement between three parties, wherein a third party, in this case, WazirX, receives and disburses money for the primary transacting parties, who are the buyers and sellers.
By implementing an escrow for peer-to-peer transactions, the funds of both the buyer and seller are held for safekeeping by WazirX until the transaction is confirmed from both the sides. This removes the risk associated with legacy P2P systems, such as over-the-counter trading solutions.
The USDT pair was added for stability, said Shetty. With the volatile prices in the P2P market, a stablecoin is required to ensure that market movement does not influence buying and selling prices negatively. This, along with the reduction of fraud using the P2P system were two major factors in the introduction of these features.
In their official post on the matter, WazirX stated:
“While building WazirX P2P, we realized that since crypto price fluctuations are beyond our control, we needed to bring in a stable coin. Since we wanted to add the stable coin with the highest liquidity in the global market, we’ve decided to go with Tether (USDT) to use in WazirX P2P.”
The INR/USDT pair will allow Indian traders to bring liquidity to the market, while also increasing the available supply of the token. This, coupled with the P2P system implemented by the exchange, may bring either the next wave in Indian cryptocurrency exchanges or a stopgap solution for the ban imposed by the RBI.