WazirX, the country’s largest cryptocurrency exchange by volume is at an advanced stage to launch its own decentralised exchange, said co-founder Nischal Shetty. The co-founder said that a decentralised exchange is like building a software where peer-to-peer cryptocurrency trades can be facilitated.
In a centralised exchange, fiat can be traded for cryptocurrency. Trades can be conducted between two cryptocurrencies too. In a decentralised exchange, there is no middle man. These exchanges are peer-to-peer, and based on smart contacts.
Shetty said that the decentralised exchange is undergoing tests and will be launched next month. WazirX was, in June, issued a show cause notice by the Enforcement Directorate that sought explanation regarding transactions worth Rs 2,790.74 crore due to foreign exchange violations. The ED had asked WazirX earlier this month to explain why “withdrawal from crypto wallets” was not a violation of India’s foreign exchange regulations.
“Because a DEX (decentralised exchange) does not own the data, even the authorities can't really go to the developer of the exchange and say I want the data,” Shetty told The Economic Times.
A growing number of 7.5 million WazirX users are interested in trading on a decentralised exchange, he said. Uniswap, MDEX are some of the decentralised exchanges worldwide.
Shetty believes that WazirX can provide something unique to the customers, especially for those who use their brand but need to go to a rival one for decentralisation.
There are currently no laws in India governing cryptocurrency and exchanges.
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