Crypto industry has always been a controversial one in the Indian landscape. Since its emergence in India, RBI has always put it under the radar to make it regulatory.
The government has imposed a 30% tax on the profit generated from the exchange of cryptocurrencies (or any virtual digital asset) effective from April 1. As soon as this law came into an effect, many crypto exchanges notices a huge drop in the volumes of crypto trading.
Now there is a few more alarming news coming which ultimately puts a question mark on the survival of the crypto industry in India.
- Major crypto exchange platforms have halted INR deposits from UPI
- CoinSwitch Kuber disabled INR deposits in its app via UPI and other bank transfer routes
What is CoinBase UPI Controversy?
Recently National Payments Corporation of India (NPCI) released a statement on the UPI system in crypto exchange platforms. NPCI said,
“With reference to some recent media reports around the purchase of Cryptocurrencies using UPI, National Payments Corporation of India would like to clarify that we are not aware of any crypto exchange using UPI.”
NPI issued this statement on the same day when the world’s largest crypto exchange platform Coinbase announced its entry in India on 7th April 2022 and said that it would allow users to buy cryptocurrencies using UPI.
After this announcement, Coinbase came under the scanner of NPCI and within 3 days they shut down all the purchase options including UPI. Now users can only sell their cryptos on Coinbase.
Coinbase also issued a statement after receiving clarification that,
“We are aware of the recent statement published by NPCI regarding the use of UPI by cryptocurrency exchanges. We are committed to working with NPCI and other relevant authorities to ensure we are aligned with local expectations and industry norms.”
CoinDCX & WazirX Disabled UPI Payment
Following the largest crypto exchange platform’s footprints, other major crypto exchanges like CoinDCX, WazirX, and CoinSwitch Kuber have also disabled the UPI payment options.
No one knows this is a temporary move or a permanent step unless we receive more clarity on the matter.
There’s a huge drop has been noticed in the crypto trading volumes after this move by the crypto exchange platforms. UPI was an easy-to-use option for users to purchase cryptos.
CoinSwitch Kuber Disabled INR Deposit in App
Another alarming news is that CoinSwitch Kuber temporarily disabled INR deposits in its App via UPI and other bank transfer routes. This decision of CoinSwitch Kuber is somehow linked with the regulatory uncertainty caused by the NPCI statement.
This could also be an effect of e-wallet service provider Mobikwik which has stopped providing services for crypto trading. Coinbase, CoinDCX, and CoinSwitch Kuber – all three were using the Mobikwik services.
Conclusion
Crypto market is facing a really tough time in India due to regulatory uncertainty. It’s a well-known fact that cryptocurrency is not a legal tender in India but investors demand to have a transparent system to make their investment secure.
Previously heavily imposed taxes and now uncertainty on UPI system use; all these uncertain regulatory makings difficult for the crypto industry to hold its ground in India.
Related Posts –
Crypto Taxation Impact on Investors & Crypto Exchange Platforms
Netflix Documentary on QuadrigaCX – Mysterious CEO Death Revealed CA$250 Millions Crypto Scam
How Indian users can invest in Crypto now?
P2P transactions can still be done from crypto exchange platforms. P2P transaction enables the user to transfer fund from their bank account to another person’s bank account via digital mediums.
What is UPI?
UPI is an instant real-time payment system developed by the National Payments Corporation of India (NPCI) facilitating inter-bank transactions.
Is WazirX accepting UPI?
No, WazirX is not accepting UPI. You can use the WazirX P2P system to buy and sell cryptos.