Ever since that statement by NPCI after Coinbase announced support for UPI on their platform for payments, the Indian crypto market has been in utter confusion because as per NPCI (National Payments Corporation Of India) no crypto exchange is known to be using UPI for any means on their platforms but actually quite a couple of crypto exchanges did had some sort of UPI services on the platforms.
The NPCI statement -
Statement by NPCI as on 7th April 2022. 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. Please see attached document pic.twitter.com/lGTcaSLKeC
— NPCI (@NPCI_NPCI) April 7, 2022
Blow To India Crypto Investors again
Another major blow came to the Indian investors as most of the crypto exchanges operating in the country like, WazirX, CoinDCX, Coinswitch Kuber and many more did cut ties with UPI related activities and on top of that some exchanges went a step further where they even suspended INR deposits by Bank Transfers or simply whatever way was available to do that barring UPI.
This sudden suspension is a big jolt for Indian investors as UPI was the ost preferred way traders liked to do their transactions for sure. If we look at the numbers of last year, transaction value on UPI topped $1 trillion in the last financial year.
Reactions
Investors have vented their anger on social media platforms like Twitter over the sudden suspension. There have not been an earlier announcement about the action but after a bit of a flak from the side of users, some exchanges did responded.
CoinSwitch Kuber’s support handle on Twitter said, deposits have been disabled to ensure compliance with all the Indian laws and regulations.
WazirX while responding to a customer tweet said, “There is still uncertainty in the banking sector to provide services to the crypto industry." WazirX and CoinSwitch have a combined user base of more than 27 million.
Why It happened ?
The recent issue for the deposits did rise after the statement by NPCI which I shared above. Exchanges said they were complying with the Indian laws as the justification for their decisions of suspending INR deposits with UPI or completely cutting fiat deposits on their exchanges.
What Now ?
As per some industry insiders, the exchanges are already in the talks with major banks in the country to providing a fix to the investors who are already tackling with the high taxation norms recently set upon crypto investments and transactions.
For now the INR withdrawals in most of the exchanges is fine and working with options like bank transfers, IMPS etc. the only issue is with the deposits, more specifically the UPI deposits.
The Crypto sector in India already faced some banking issues in the month of May as banks got an informal guidance from RBI (Reserve Bank Of India) to cut ties with entities dealing in cryptocurrencies.
