CoinSwitch Kuber and WazirX, two major Indian crypto exchanges, have stopped rupee deposits to purchase cryptocurrencies via a widely used state-backed transfer network, prompting consumers to repeat their calls for regulatory clarification.
Crypto exchanges are blocking the transfer network concerning Indian investors:
India has spent years working on a bill to prohibit or regulate cryptocurrencies, with the central bank backing a ban due to threats to financial stability; however, the government’s recent move to tax cryptocurrency revenue signals approval.
The efforts come after the National Payments Corporation of India, the operator of the state-backed United Payments Interface (UPI), which facilitates bank transfers, said last week that it was unaware of its usage by any crypto exchange in a one-line statement.
Users could not load deposits into CoinSwitch’s app, but they could still withdraw money. “You closed the INR deposit without providing any details. At the very least, tell us how long it will be closed”, Avijit Debnath, a Twitter user, encouraged the discussion on the social media site.
CoinSwitch, which claims to have over 15 million users, did not reply to Reuter’s inquiries right away.cThe NPCI did not answer right away, either.
According to a person familiar with the situation, CoinSwitch’s decision to stop using UPI was prompted by “regulatory uncertainty” following the NPCI announcement. A battle of wills “UPI is not available,” WazirX said on Twitter, adding that it has no anticipated time to repair the problem.
WazirX claimed in a statement that their UPI deposit function was suspended in December but declined to comment. Users were alarmed when the firm said on April 1 that rupee deposits via popular payments app MobiKwik would be disabled “until further notice.”
India said in February that revenue from cryptocurrencies and other digital assets would be taxed at 30%, signalling that the government welcomed digital currencies. Still, the business has been hampered by regulatory ambiguity.
TMT Law Practice founder Abhishek Malhotra stated, “Regulatory clarification is the necessity of the hour.” “Right now, there are a lot of contradicting signals about the regulatory regime, which leads to uncertainty.”
CoinSwitch said in October that it had secured more than $260 million for a $1.9 billion value, highlighting the growing popularity of cryptocurrency trading. The scale of India’s crypto market is unknown. However, industry estimates put the number of investors between 15 and 20 million, with total holdings of over 400 billion rupees ($5.25 billion).