Peer-to-peer deals are rising in popularity among cryptocurrency exchanges, with some platforms directly accepting from coin buyers to overcome the curbs imposed by banks and payment companies, while the Reserve Bank of India voices its reservations about these virtual digital assets.

After receiving an order from a customer, the alternative exchanges the vendor's bank account information with the client in a P2P transaction. The customer then transfers funds to the vendor using any of the conventional on-line payment options, while the vendor exchanges the cryptocurrency in her/his pockets for the cryptocurrency in the customer's crypto pockets.

The exchange just connects the buyer and seller, but the money does not move through the exchange - unlike in any modern bourse running a faceless order-matching software engine in executing orders and settling trades.

Alternatively, other exchanges have chosen a different approach, accepting payments directly from crypto buyers in their current accounts. Once the funds are received, they are credited to the trader's exchange account, which can then be used to buy cryptos.

Alternatively, other exchanges have chosen a different approach, accepting payments directly from crypto purchasers in their current accounts. Once the funds are received, they are credited to the trader's exchange account, which can then be used to buy cryptos.

The current account is usually in the name of the company that provides the crypto exchange with software. One of the largest private sector banks has such an account with a major exchange.

Until recently, exchanges operated in a unique way. Money was received or paid into a nodal account set up by a third-party payment processor that processed payments for the exchange's deals.

However, due to payment providers' refusal to work with cryptocurrency exchanges - presumably in response to RBI's hints - the exchange in question was compelled to find an alternate payment method.

A current account is also used to cover an exchange's expenses, such as salaries and rent, rather than to facilitate trades on the crypto platform.

Aside from the payment barrier, the crypto community will soon have to cope with a 1% tax deducted at source on all selling earnings.

Some big-ticket traders, according to crypto investors, have already switched their positions to offshore exchanges, despite the fact that banks consider sending money abroad to buy cryptocurrencies (through the RBI's liberalized remittance channel) to be a violation of exchange control restrictions.