An increasing number of digital asset exchanges in India have started to list stablecoins such as Tether (USDT) and TrueUSD (TUSD). It appears that this could be an attempt by local exchanges to reduce the negative impact on India’s crypto economy, as the country’s reserve bank (RBI) has prohibited financial institutions from offering banking services to those dealing in digital currencies.
Exchanges Add Stablecoins Tether (USDT), TrueUSD (TUSD)
Last week, Unocoin, a major Indian cryptocurrency exchange, announced that it would support TUSD on its Unodax trading platform. TUSD is an ERC-20 token, which was developed on the Trusttoken platform, and each TUSD is said to be redeemable 1-for-1 for US dollars.
Currently, Unodax is reportedly offering support for 23 different TUSD trading pairs, which include Bitcoin (BTC), Ethereum (ETH), Litecoin (LTC), and Ripple (XRP). According to Inc42, an Indian media company, “the decision [to list TUSD] has been taken to minimize the RBI circular’s impact on [local] cryptocurrency investors and traders.”
“Plausible Solutions” To RBI’s Ban
As reported by CryptoGlobe, the RBI instructed all local banks on April 6th to stop offering banking services to crypto-related businesses and individuals looking to convert digital currencies to fiat (or vice-versa) through exchanges.
Sathvik Vishwanath, the CEO of Unodax, explained:
After the RBI banned bank transfers for crypto trading and investments, we were looking for the plausible solutions to help our users continue to hodl, without any disruptions and hassles.
Vishwanath added that with stablecoins such as TrueUSD, users would have a reliable medium of exchange for other digital assets as it would help “minimize their risks in a volatile [crypto] market.”
Zebpay, a leading Indian crypto wallet and exchange service, also recently announced that it would begin listing TUSD on its trading platform. At present, Zebpay is offering support for only two trading pairs: BTC-TUSD and TUSD-INR (Indian Rupees). Users looking to transact in TUSD on Zebpay will reportedly not be charged withdrawal fees until August 31st, 2018.
“Tens Of Thousands” Of New Crypto Traders
Other popular Indian exchanges such as Wazirx have started offering exchange-escrowed peer-to-peer (P2P) services that allow users to make deposits and withdrawals with INR by using Tether (USDT). USDT was created by Tether Limited and the company claims that each USDT is backed by one USD held in reserve. Moreover, USDT uses a specialized cryptocurrency and communications protocol called Omni Layer, which was developed on the Bitcoin blockchain.
While there has been some controversy regarding Tether’s USDT, its demand does not seem to have been affected. Notably, Wazirx’s new USDT escrow service has become quite popular in India, as the exchange’s CEO Nischal Shetty revealed that “tens of thousands” of new traders registered on the exchange after it began offering the P2P crypto escrow service.
Commenting on USDT’s ability to increase liquidity on exchanges, the WazirX CEO noted that extreme fluctuations in cryptocurrency prices was not something their trading platform could control. However, by offering users a stablecoin such as USDT, crypto investors could potentially be able to take advantage of the token’s relatively high liquidity and stable price.
Several other Indian cryptocurrency exchanges such as Zecoex, Coindelta, and Koinex have also recently added support for USDT and/or TUSD.