The future of cryptocurrencies appears bleak as many exchanges dealing in cryptocurrencies like Bitcoin, have either shut shop or in the downturn, Mint has reported .

This comes after Reserve Bank of India (RBI), India's banking regulator, sent shockwaves in the Indian financial sector when it barred banks and other entities from having any linkages to virtual currency dealers. This clampdown was announced in April 2018 and the central bank had given stakeholders, three months to comply with the regulation. Since 7 July, all trading in cryptocurrencies came to a standstill.

Following this, two months later, one of India’s oldest cryptocurrency exchanges, Zebpay, shut down. Though Internet and Mobile Association of India (IAMAI) has filed a petition in the Supreme Court, challenging RBI’s reasoning to ban bitcoin and other digital currencies, their fate still hangs in the balance.

There however, has been an uptick in the volume of transactions in Peer-2-Peer (P2P) cryptocurrency trading since RBI’s ban. In normal crypto-exchange model, there is a central exchange entity that facilitates transactions between a buyer and a seller and ensures safe and secure transfer of properties between the two. In return, it charges fees from users.

However, in the P2P model, there is no facilitating entity and transactions happen directly between two individuals. While some players hold that P2P model does not violate RBI’s regulation, others are not entirely convinced.

Bitcoin and other cryptocurrencies like Ethereum have attracted a negative reaction from RBI due to their lack of intrinsic value (they are not guaranteed by any central bank), negligible investor protection and untraceable nature of transactions.