Several major Indian crypto exchanges recently halted the option to buy cryptocurrency using United Payments Interface (UPI), India’s biggest national digital payment system. This move comes days after Coinbase entered the Indian market with integrated UPI payments support which was halted almost immediately.
Major Indian Cryptocurrency Exchanges Disable Buying Options
CoinSwitch Kuber and WazirX, India’s largest cryptocurrency exchanges, have joined the increasing number of Indian crypto platforms to disable rupee deposits using UPI. The move comes following a statement by the National Payments Corporation of India (NPCI) that claimed it was not aware of “any crypto exchange using UPI.”
On April 7, Coinbase announced that it would allow Indian users to purchase cryptocurrencies using UPI. On the same day, the National Payments Council of India (NPCI), a division of the country’s central bank, said that it was uninformed if any crypto platform supported the UPI payment method.
“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.”
Coinbase was the first to react to the statement by halting the UPI payment option. Subsequently, Mobikwik, a digital wallet that supported UPI and had partnered with major crypto exchanges, stopped supporting crypto trading. And more recently, CoinSwitch Kuber and WazirX also followed suit by disabling UPI payments.
Notably, CoinSwitch Kuber, which has more than 15 million users, has banned all forms of payments, including bank transfers. In a Twitter message, the exchange said:
“For crypto withdrawals, we are still engaging with regulators and policymakers in bringing regulations. Until some clarity is achieved, the crypto withdrawal/deposit functions will remain disabled on the CoinSwitch platform. While we understand it’s an inconvenience, we believe that it’s only a minor bump in our way to regulate crypto in India.”
Meanwhile, Indian crypto users, annoyed with the recent drama, took to Twitter to reveal their frustration. “Weird fact – Actual gambling apps get proper payment service support while crypto exchanges are being alienated,” one user said.
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Cryptocurrency Taxes Apply at 30% but Regulatory Uncertainty Still Exists in India
Earlier this year, India’s government announced its crypto tax plans, which included a proposal to tax gains from crypto transfers at a 30% rate. While the rate was unprecedently high, crypto veterans welcomed it with the idea that it would remove regulatory ambiguity around the sector.
At the time, Nischal Shetty, CEO of WazirX, said they hope the new bill “removes any ambiguity for banks” and persuade them to proceed with crypto transactions without any fear. Likewise, Avinash Shekhar, CEO of crypto exchange ZebPay, said:
“Thirty percent tax on income from virtual digital assets, while high, is a positive step as it legitimises crypto and hints at an optimistic sentiment towards further acceptance of crypto and NFTs.”
However, despite all the optimism, there have not been considerable improvements around regulatory clarity. In fact, reports about the exodus of Indian crypto talent have recently surfaced that claim thousands of developers and investors in the country are leaving for more crypto-friendly destinations.
Nevertheless, as of now, interested Indian users can use peer-to-peer (P2P) transactions to buy or sell digital assets. P2P refers to the exchange of cryptocurrencies between two users without the interference of any intermediary. Almost all crypto exchanges have a P2P section, though users need to beware of falling victim to scammers.
It should be noted that the Reserve Bank of India had tried to prevent cryptocurrency exchanges from working with banks in the past, a decision that was eventually overturned in the Supreme Court of India.
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About the author
Ruholamin Haqshanas is an accomplished crypto and finance journalist with over two years of experience writing in the field. He has a solid grasp of various segments of the FinTech space, including the decentralized iteration of financial systems (DeFi), and the emerging market for non-fungible tokens (NFTs). He is an active user of digital assets for remittances.