Reserve Bank of India banned banks from supporting cryptocurrency transactions after reporting a virtual currency fraud case in April 2018. However, the Supreme Court lifted the injunction in March 2020. The contradictions of Indian cryptocurrency trading methods between the government and banks freeze cryptocurrency exchanges.
There is no official ban but when the government decision of going against the crypto trade many banks took a break off. According to the cryptocurrency exchange, several banks have stopped transferring transfers to encrypted accounts in the past week, so the exchange can no longer access its APIs. Paytm Payments Bank followed suit when it stopped supporting cryptocurrency transactions, which made it difficult for exchanges to find new banking partners.
Here in India WazirX, CoinDCX, BuyUcoin, are the most conventionally used interfaces. Neeraj Khandelwal, the CTO of coinDCX stated that Paytm was one of their active banking partners and added that they are currently in discussions of a comeback soon. The exchange even considered other payment channels when conducting remittance (non-commercial transfer of money by a foreign trader) transactions. Currently, they are processed through automated third-party channels, while Indian rupee deposits are made through its other banking partners. The company did not disclose its name.
BuyUcoin’s CEO Shivam Thakral quoted that Paytm payments banks stopped bracing up without giving any prior notice and “official reason” and they started using the Mobikwik payment gateway. Banks prevent payment gateways from serving crypto companies. Payment gateways have restrictions. Currently, transaction through a medium is a big task for people who want to invest more in crypto.
India’s first cross-company cryptocurrency exchange. DigitX was very intelligent and very lucky as it did not cooperate with Paytm Payments Bank or any bank that no longer supports cryptocurrency exchanges. Co-founder of DigitX Ashish Mehta told, “awareness of investors in this field.” The final step to end or restrict the support of various banks such as ICICI Bank, HDFC Bank, Kotak Mahindra Bank, etc. for cryptocurrency exchange.
“Peer-to-peer trading can be facilitated through exchanges. Cryptocurrency pairs can be bought and sold. The biggest loss here is that many people do not come forward to invest huge amounts as the interface lacks and this would ultimately result in low liquidity and Digi cash flow. Due to some fraud’s RBI had to stop the crypto trading and one of the reasons given is that cryptocurrencies are not illegal, although India does not regulate them.
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