India’s cryptocurrency ecosystem is burgeoning in the number of crypto holders, the volumes traded, exchanges available and developments in the field. Bitcoin (BTC) in particular is witnessing a surge in demand in India with the rise of the new peer to peer exchanges (P2P) in the past months.
In the past few years, P2P exchanges have come alive, challenging centralized exchanges, by offering users a direct marketplace to buy BTC with little KYC requirements and non-custodial services. In development-rising countries like India, the P2P industry is gaining traction so much that centralized exchanges such as OKEX started offering a peer marketplace.
Growth of P2P exchanges in India
Since the Supreme Court of India overturned the central bank’s – Reserve Bank of India (RBI) – blanket ban of crypto, the Bitcoin P2P market has surged to new all-time highs in the country. According to UsefulTulips, weekly trades across two of the top P2P Bitcoin exchanges, LocalBitcoins and Paxful, amounted to a record high of $4.4 million in the week ending Aug 4.
Before we look at some of the top P2P BTC exchanges in India let’s step back and focus on how P2P exchanges work and why they are important.
Peer-to-peer Bitcoin exchanges are different from normal centralized crypto exchanges in that you buy BTC directly from a person who sets the price instead of an order book. P2P exchanges allow users to find the best price for Bitcoin and offer a list of payment options.
Some of the pros of P2P Bitcoin exchanges include low trading fees, privacy and non-custodial wallets to reduce single-point-of-failure attacks. To ensure hacks and scams are minimized, Bitcoin P2P services offer escrow services during trades.
Table 1: Comparison of top P2P Bitcoin exchanges in India
|Exchange||Deposit Fees||Multiple coins Support||Payment options||Security||KYC/AML|
|Binance P2P||No||Yes||Multiple||Excellent||Very High|
So, which are some of the best P2P Bitcoin exchanges in India?
Founded in 2015 by Ray Youssef and Artur Schaback, Paxful, a global P2P Bitcoin-only exchange, has grown into the largest P2P exchange in trading volumes across India. The chart below shows the rising trading volumes on Paxful in 2020.
The P2P exchange offers over 300 payment options including bank transfers, credit/debit cards, online wallets, and cryptocurrencies. Of the 337 options, 26 are crypto enabled wallets including USDt, DOGE, ETH, XRP, LTC, NEM etc.
Paxful fees are charged at 0.5% to 5% depending on the payment method selected with no charges on buyers. Withdrawals to external wallets from the Paxful wallet is charged at 0.0005 BTC.
Unverified users on Paxful are limited to a $1,500 trade-and-withdrawal cap every year. To trade higher amounts users need to enter extra KYC verification information tiers.
OKEX, one of the largest crypto exchanges in the world, launched its peer to peer Bitcoin exchange in India earlier in August with deep liquidity, zero trading fees on P2P, and a fast KYC process. The exchange allows Indian citizens to buy and sell Bitcoin and Tether’s stablecoin, USDt, using Indian Rupees with major bank transfer gateways such as UPI, IMPS, Neft and RTGS.
Unique from other P2P exchanges, OKEx allows users to switch between the order book and P2P marketplace to find the best rates for BTC and USDt. The platform offers 0% transaction fees while directly connecting users’ wallets to the main trading platform. The exchange allows up to 500 BTC withdrawal limit for unverified users daily with VIP users able to withdraw between 600 BTC and 2000 BTC in seven tier levels. Here is the step to step process to perform the P2P trading on OKEx.
- Highly Liquid,
- Easy to sign up
- Zero fees on trades.
- Single account access to all trading needs. The same account you use for INR to crypto conversion, you can access spot trading, high USDt savings rate via ok piggy bank, and their very popular IEOs.
- Still relatively young in the market
LocalBitcoins boasts as the first P2P Bitcoin exchange to gain mainstream adoption in India. Since the start of August, the P2P exchange registered $3.7 million in India – only bettered by Paxful – its highest two-week trading volume in 2020 yet.
LocalBitcoins allows users to exchange local currency i.e. Indian Rupees into BTC only. The platform provides an escrow to facilitate the trade between users charging no fees for deposits. Withdrawals are charged at 0.0001 BTC and the trade transactions at 0.5% for both buyers and sellers. The exchange has a trading limit of $1000 annually for unverified users with higher amounts offered to Tier 1, Tier 2 and Tier 3 customers.
LocalBitcoins offers a vast array of over 200+ payment options in INR including bank transfers, PayPal, PayTM, Google Pay and PhonePE etc. The exchange lacks a person to person (cash) option due to security purposes.
Pros: Higher liquidity and buy options than peer exchanges
Cons: Has a strict KYC compliance system for users.
Indian crypto exchange, WazirX offers an auto-matching P2P exchange that directly matches your buy order with a seller. The WazirX P2P platform currently offers only one crypto, USDt, which can then be traded for over 100+ cryptos on the exchange’s market page. The exchange has zero deposit and transaction fees, making it the cheapest of P2P exchanges across India.
The P2P exchange allows a minimum buy of 5 USDt (~77 INR) and a maximum withdrawal limit of 10,000 USDt. WazirX employs unique minimum withdrawal requirements for each cryptocurrency as seen here. Currently, KYC’d users can withdraw a minimum of 0.001 BTC and a maximum of 3 BTC every 24 hours.
Pros: Auto-matching buyers and sellers
Cons: Only offers USDT buys on the P2P platform
Hodlhodl.com is a global multisig Bitcoin P2P platform offering non-custodial services on buying and selling BTC through a peer network. The exchange charges a maximum fee of 0.3% to each of the parties in the trade, totaling to 0.6% on each trade. The exchange ensures security through a specially created escrow through Multisig (P2SH) contracts. This gives special access to the funds in the escrow in case of a failed trade.
Currently available in over 150 countries, Hodlhodl.com offers a wide list of payment options including PayPal, cash trades, Western Union, Bank transfers, SWIFT and a number of cryptocurrencies including ETH, USDt and TUSD.
Pros: Lack of KYC/AML compliance
Cons: Traders hike BTC prices over30% the market price
As Bitcoin continues to rip through new resistance levels, the peer-to-peer exchanges are providing a clear path to developing countries’ users to onboard onto digital assets. The growth of OKEX, PaXful, and Localbitcoins shows there’s a demand for Bitcoin across the world’s largest democracy. These exchanges currently offer the deepest liquidity for users in India while providing a secure platform to complete P2P Bitcoin trades.