Cryptocurrency investment in India has reportedly slowed to a trickle as both investors and cryptocurrency exchanges grapple with banks’ refusal to accept digital currency transactions.
Despite the face-off, industry executives are hopeful that banking support will resume soon, according to a report by Moneycontrol.
As reported by BloombergQuint, most crypto exchanges, including WazirX, CoinDCX, Zebpay, BuyUCoin and CoinSwitch Kuber, began several days ago to tell customers that it was not possible to make deposits using their platforms because of problems with their payment partners.
The report cited an unnamed source as having confirmed that some banks had ordered the immediate cessation of all crypto payments, but that others had taken a phased approach, with one lender looking to end all payments within around 10 days.
Faced with the block on crypto transactions, exchanges have been seeking workarounds.
Bengaluru-based exchange Bitbns, for instance, is reportedly reducing its reliance on payments processors to continue servicing its clients, although it remains at the mercy of the banking system.
“We do it internally, and there has not been an issue with deposits and withdrawals so far,” the report quoted Bitbns Chief Executive Gaurav Dahake as saying. “But if our own bank account is frozen, then there will not be much that we can do.”
Digital currency exchanges in the country have complained that payment gateways and banks have been blocking cryptocurrency transactions on the basis of a directive from the country’s central bank that was recently overturned by the Supreme Court.
Even the National Payments Corporation of India has refused to ban cryptocurrency trading by banks, putting decisions on whether to block trades in the hands of individual lenders, which have nevertheless fallen into line with the superseded central bank directive.
