Indian Crypto Exchanges Are Blocking Transfer Network, Spooking Investors 

Indian Crypto Exchanges Are Blocking Transfer Network, Spooking Investors
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CoinSwitch Kuber and WazirX, two major Indian crypto exchanges, have stopped rupee deposits used by their users for purchasing cryptocurrencies via a widely used state-backed transfer network, prompting consumers to renew their calls for regulatory clarity.

India has spent years working on a bill to ban 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 income 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 use 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 have closed the INR deposit without any information. At least let us know how long it will be closed,” a Twitter user, Avijit Debnath, urged the exchange on the social media platform.

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CoinSwitch, which claims to have over 15 million users, did not respond to Reuters inquiries right away.

No comment on the issue was available from the NPCI.

According to a source familiar with the situation, CoinSwitch’s decision to stop using UPI was prompted by “regulatory uncertainty” following the NPCI statement.

“UPI is not available,” rival exchange WazirX likewise notified users on Twitter, adding that it had no anticipated time to fix the problem.

WazirX claimed that their UPI deposit function was suspended in December but declined to elaborate.

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%, signaling that the government welcomed digital currencies, but the business has been hampered by regulatory ambiguity.

“Regulatory clarity is the need of the hour,” said Abhishek Malhotra, a founding partner of TMT Law Practice. “There are currently a lot of conflicting signals on the regulatory regime, leading to lack of certainty.”

CoinSwitch said that it had received more than $260 million for a valuation of $1.9 billion, highlighting the growing popularity of cryptocurrency trading.

Although no official data on India’s crypto sector is available, industry estimates put the number of investors between 15 and 20 million, with total holdings of around 400 billion rupees ($5.25 billion).

Also Read: Coinbase Suspends Option To Buy Cryptos Like Bitcoin, Ethereum, Dogecoin In India A Day Into Launch


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