Major Indian crypto exchanges CoinSwitch Kuber and WazirX have disabled rupee deposits for cryptocurrency purchases using a widely used state-supported transfer system, prompting users to voice concerns on social media.
India has spent years working on a law to ban or regulate cryptocurrencies, with the central bank backing a ban because of their threat to financial stability, but a recent decision to tax income from these currencies suggests acceptance by authorities.
The decision follows a one-line statement last week from the National Payments Corporation of India, saying it was not aware of any crypto exchange using its United Payments Interface (UPI) framework, which facilitates bank transfers.
On Wednesday, CoinSwitch’s app did not allow users to load deposits, while rival exchange WazirX said on Twitter, “UPI is not available”, adding that it had no estimated time to resolve the issue with UPI deposits.
“You closed the INR deposit without any information. At least let us know how long it will remain closed,” a Twitter user, Avijit Debnath, asked CoinSwitch on the social media platform.
An industry source with direct knowledge of the matter said CoinSwitch’s decision to stop adopting UPI was the result of “regulatory uncertainty” following the NPCI statement.
The companies did not immediately respond to a request from Reuters for comment.
The NPCI did not immediately respond.
India decided in February to tax income from cryptocurrencies and other digital assets at 30%, indicating authorities have accepted digital currencies but regulatory uncertainty has weighed on the industry.
In October, CoinSwitch said it had raised more than $260 million for a valuation of $1.9 billion, underscoring the rising popularity of crypto trading.
No official data is available on the size of the Indian crypto market, but industry estimates say investors range from 15 million to 20 million, with total holdings of around Rs 40,000 crore ($5.25 billion).
(Disclaimer: Coinswitch is an advertiser on the DailyExpertNews Network)