With Indian crypto exchanges halting Unified Payments Interface (UPI) services and restricting net banking access, crypto users are stuck with their digital assets looking for workarounds and new options to initiate trading.
This comes after a circular by the National Payments Corporation of India (NPCI) stated that they are not aware of any crypto payments happening via UPI. This led to crypto exchanges such as Coinbase withdrawing their UPI facility, adding a roadblock for users to initiate transactions on exchanges.
In this week’s column, we discuss how users can trade on crypto platforms in the absence of UPI and banking services.
Peer-to-Peer (P2P) trading
Peer-to-Peer trading (P2P) allows buying and selling of cryptocurrencies without the need of any third party or intermediary. Although you technically do require a platform where buyers and sellers can connect, you don’t need to transact with the platform necessarily, all the transactions occur between the two parties — seller and buyer.
Unlike crypto exchanges, P2P trading gives you more hold of who buys your crypto assets. For instance, if you want to sell a crypto asset that you hold on a crypto exchange, you use charts to determine the optimal time to buy, sell or hold cryptocurrencies. But, when you decide to sell, the final price of the asset depends on the market price of the exchange.
On the other hand, P2P trading gives users full control over the process. You decide who to sell your assets to and at what price, however, it could carry some risk where there is no ‘middleman’ monitoring the deal. This is where platforms like Binance and Paxful become essential.
“By allowing people to transact freely around the world, peer-to-peer platforms open up access to the global financial system. Everyone has the freedom to choose their desired offers, trading partners, and margins,” Ray Youssef, co-founder and CEO of Paxful, told indianexpress.com.
Step-by-step instructions
There are many things you can do on P2P platforms, including buying, selling, and trading cryptocurrencies such as Bitcoin, Ethereum, Litecoin, etc. Here’s a step-by-step tutorial on how to buy Bitcoin on the P2P trading platform. (For demo purposes, we have used the Paxful P2P trading platform)
#You must first open an account by signing up on the platform.
#The platform charges no fee from the buying party. The amount of Bitcoin in the trade is exactly what you’ll get in your Bitcoin wallet.
#When setting out to buy, the three key elements to consider are payment method, amount, and currency. You can buy Bitcoin by either creating a buy offer or offering to buy Bitcoin from a seller on your terms. Read the vendor’s instructions and make a buy offer that has a reasonable chance of converting.
#When you’re ready to buy, you can then select your preferred method of payment. Make sure when you use any payment method, it has the same identification as the account you are transferring funds from as a best practice.
#The vendor will confirm your payment and your Bitcoin will be released.
It’s important to understand that traditional providers can charge high fees or quote unfavourable exchange rates when completing a transaction. When compared to peer-to-peer platforms, these fees are expensive and inefficient.
Keeping transactions safe and anonymous
To ensure safe trading, P2P trading platforms often use security features such as encryption and two-factor authentication. This gives users the confidence to engage in transactions on these networks.
P2P facilitates trading globally, opening up a world of possibilities as it allows you to trade in any currency or asset that you like. Once a trade starts and your crypto is held in escrow, the seller cannot cancel the trade; it can only be cancelled by the buyer or auto-cancelled by the system if the payment is not made by the buyer within the payment window.
In terms of anonymity, crypto is pseudonymous in the sense that your name is not directly linked to the transactions that you make. It should be noted that most of the P2P platforms implement standard Know Your Customer (KYC) and Anti-Money Laundering (AML) processes before trading. All users go through KYC processes; however, these safety procedures can vary on other financial platforms.
Last word
P2P platforms make it easier to find buyers and sellers for your desired crypto at any time, which means it’s easier to find buyers or sellers for your desired currency at any time. However, scammers are also increasingly taking advantage of P2P trading with new platforms, promising zero trading fees. It is important to do your research before choosing a platform and always exercise caution when making trades online.
Peer-to-Peer trading (P2P) allows buying and selling of cryptocurrencies without the need of any third party or intermediary. (File Photo) 
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