Undeterred by the Indian government’s crypto ban, the crypto population has not deterred from finding out the ways to purchase and trade digital assets. According to some latest reports, Indians have resorted to the modes of “Dabba trading” and peer-to-peer models for crypto-trading.
Crypto Ban Effect
Dabba Trading usually refers to trading outside the order books in an illegal setting that is different to a formal OTC market. These tactics were used by Indian stock trades since decades but seeing the ban by the Indian government after April 2018, they are used extensively. The hawala network which is an underground logistics framework used by criminals for money and goods transfer can be compared to Dabba process. The only difference is the execution of trades on a platform connected with a foreign bank instead of the exchange of chits at the destination. Known for their financial prominence, several Dabba brokers are present in Surat, Kolkata, Mumbai and Ahmedabad, as reported.
These Dabba brokers work as a bridge between a customer and foreign trading company where the broker buys Bitcoin using an overseas account and accepts that money in cash. He sells them back when the bet placed in India is settled and the customer receives the difference in cash. These margins are settled in the same day or maximum by a week. The money in cash is routed through hawala channels, whereas the conversation takes place through Telegram as the app has end-to-end encryption. Ignoring the Indian government has a maximum annual remittance limit of $250,000, the brokers find a way around it to continue their business in cash or cheque. As reported by CCN, India currently waits for the September 2018 judgement on cryptocurrencies.