The corporation that runs UPI payments in India, the National Payments Corporation of India (NPCI), has refused to ban cryptocurrencies in India. It has authorized banks to check if their compliance and legal departments are okay with the increasing number of cryptocurrency transactions and have directed them to follow what fits best. In the past few days, many banks have been regulating and restraining the payment gateways that relate to cryptocurrency trades, so the advice issued by NPCI is crucial in deciding the future of crypto trading in India.
Unlike Visa & MasterCard, the domestic NPCI has told some banks to choke payment gateways for crypto trades. When leading banks are gradually blocking all the payment methods related to all the cryptocurrency dealers, NPCI advice is proved to be very important. According to the economic times report, more than half of the banks have directed payment gateways operators to the blacklist merchants involved in cryptocurrency trade. These banks have prevented their customers from using online funds transfer facilities like UPI and net banking to sell or purchase cryptocurrency. An industry expert says that if NPCI decides to disable UPI and Rupay cards to invest in cryptocurrency, then it will apply to all the banks, and investors will have fewer payment options. Customers of banks, which have disabled cryptocurrency trades, cannot use net banking, UPI, etc., to invest in the crypto. It is not clear about the banks, which have allowed this trade and how long they will allow it.
Although cryptocurrency trading has been facing many difficulties in payment gateway recently, there is still a steady rise in the number of newer cryptocurrency users. Therefore, if banks refuse to facilitate payment gateways for trading the same, it may lead to havoc and a lot of traffic and burden on the few gateways that are still up and running. Furthermore, considering these difficult times of the pandemic, not monetizing investments leads to a lot of discomfort and agony to the traders looking to dissolve their cryptocurrency coins for monetary values. In this situation, merchants move to other banks that allow crypto operations or use less efficient funds transfer options like ITP, RTGS, and NEFT, which are rarely used for currency trading and basic products on platform exchanges. If the banks do not support such trades, then it will be difficult for the traders to sell assets.