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WazirX is in talks to launch a decentralised exchange, Co-founder Nischal Shetty said. Unlike a centralised setup, where a business takes care of a customer’s cryptocurrency and controls opening an account on the app, a decentralised exchange works without an intermediary organisation for clearing transactions. The trades are performed on self-executing smart contracts.
It is like building software where peer-to-peer crypto trades can be promoted, Shetty said. The decentralised exchange is currently being tested and will launch by next month. “Because a DEX (decentralised exchange) does not own the data, the authorities can not ask the data from the developer of the exchange,” Shetty added. The Enforcement Directorate (ED) had issued a show-cause notice to WazirX asking to explain transactions of Rs 2,790.74 crore on account of foreign exchange rules violations. The exchange is preparing a response to the federal agency that investigates money laundering.
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Several industry experts said decentralised exchanges are less burden legally and provide excellent transparency and control to crypto holders. There are very few chances of hacking and price manipulation. Anyone in the world can manage a decentralised exchange, and a user doesn’t have to go through any identifications like ‘Know Your Customer’. Users go on the platform to conduct peer-to-peer transactions and operate the crypto on their private wallets. There are several decentralised exchanges globally, like Uniswap, Sushiswap and MDEX, according to crypto tracking website coinmarketcap.com. “We know we can give something more unique to the customers, particularly for those who are already using our product but are looking for decentralisation and have to switch to a different brand,” Shetty stated.
