Despite banning cryptocurrency from Indian market, there has been a significant rise in the trade of Bitcoins in the recent months.
The Reserve Bank of India issued a public notice in April this year advising all the financial institutions to prohibit from virtual currency trade. However, it is alleged that the Bitcoin trade increased multiple times through Dabba trade. The entire purpose of the ban gets defeated as it doesn’t prevent the flow of illegal money.
According to Business Today, it is stated that Dabba trading is a course of action in which the broker trades that the money through hawala network instead of investing it in the trade or commodity market. In this case, it becomes extremely difficult to track the money invested through different channels. It is further mentioned that the accounts are mostly based in abroad like Europe, Dubai etc. The moment RBI enforced the ban on the transaction of cryptocurrency in their payment system, Dabba trade came into light.
How Do Dabba Traders Invest Cryptocurrency?
These traders are usually based at the financial capitals of India like Mumbai, Kolkata, Ahmedabad, Surat, and Rajkot. These brokers are the main connectors between the client and the foreign trade firms. In addition to this, the broker takes money in cash and buys cryptocurrency in an overseas-based trade account. He later sells them after the bet is finalized in India with the client.
The profit or the difference is pain cash and the margins are settled within a given time frame. The entire transaction is done in cash which is not recorded anywhere, and hence cannot be monitored by the government officials.
Cryptocurrency especially Bitcoin prices soared high in December last year which caught the attention of many investors in India. The prices later dropped to $8,000 in July which was about $20,000 last year. The market experts believe that the prices will regain the market cap in a few months.[The views and opinions expressed in this article are those of the authors and do not necessarily reflect the views and/or the official policy of the website. ]