“Dabba” Trading to Bypass Indian Crypto-Ban
Several initiatives have kicked off as a result of news circulating that Indian cryptocurrency traders were bypassing the reserve banks ban on crypto. A common method that many of the exchanges are adopting following the ban is P2P network trading, completely forfeiting the need for financial institutions like banks. In light of this, KoinEx and WazirX have collaborated to launch KoinLoop, another service operating on peer-to-peer trade.
The Chief Executive Officer of WazirX stated that should banking continue to be banned for digital currency exchanges, the only alternative is a method with no bank involvement. To handle the new methods of operating, WazirX is taking a new approach to trading through “Dabba.” Dabba is a method in which trade occurs through a “hawala” platform as opposed to any Exchange-connected system.
Trading only occurs with an offshore bank account within the UK and Dubai as another favorable location. As per reports, hawala traders are believed to be operating within Surat, Ahmedabad, Rajkot, and others as a connection between any customer and any of the offshore trading companies. The process was best described as brokers accepting fiat currency, purchasing BTC through an offshore account and then sells them back once the settlement is concluded within India.
Most Dabba trading, as reported, occurs on the crypto-famous messenger app, Telegram. Money as cash is then guided through several open channels within the hawala system and is then transferred officially or otherwise to the offshore account. Payments are then handed over in cash, cutting out the need for banks. P2P trading is quickly growing as a favored alternative in India. KoinEx and WazirX are also some of the exchanges adopting the alternative approach.