India’s largest crypto exchange, WazirX is soon going to introduce its own decentralized exchange. Its co-founder Nischal Shetty said that the company is in advanced trials of launching the new exchange.
Decentralized exchanges (DEX) are a type of cryptocurrency exchange that allows for direct peer-to-peer cryptocurrency transactions to occur online securely and without the need for an intermediary.
A decentralized exchange has the following advantages over its centralized counterpart:
- These exchanges doesn’t store any user data on the platform hence very privacy-friendly.
- No central authority is responsible for the actions going on the platform.
- Less chances of price manipulation and greater transparency & control.
- Lack of centralized infrastructure makes it less prone to hackers.
- Governments around the world are more relaxed towards decentralized exchanges hence less cumbersome legally.
Currently, there aren’t any specific details available about the WazirX decentralized exchange. However, it is currently undergoing trials and will launch next month.
Shetty said, “Because a DEX (decentralized 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.”
The development comes after WazirX’s ongoing tussle with the Indian regulatory committees. A few weeks back, the Enforcement Directorate (ED) issued a show-cause notice to WazirX for explaining transactions worth Rs 2,790.74 crore on account of foreign exchange rules violations.
WazirX is currently preparing a response to the federal agency probing money laundering.
Currently, no laws are differentiating or regulating cryptocurrencies in the country. While the government has set up a new panel for studying the regulation of cryptocurrencies, it’s still not clear what the government’s stance is going to be. Many expect a ‘regulatory’ stance compared to an outright ban due to the Finance Ministry’s comments.