Over the past few weeks, trading applications like ZebPay, Coinswitch, and WazirX have come across major issues with completing transactions related to the sale and purchase of cryptocurrencies. Traders and investors from India have been left hanging after banks collectively decided against facilitating cryptocurrency trades amid the confusion concerning regulations and trade rules for crypto assets in the market. Since the past week, there has been intense confusion among the banking institutions in India. It is due to the lack of any official statements by the regulators like the Reserve Bank of India or the Supreme Court discouraging or encouraging the use of these digital currencies.
The banks have started to bottleneck the transactions that occur in these cryptocurrency-trading applications and have initiated declining and blocking the payment gateway services for cryptocurrency-related trades altogether. ICICI Bank was among the first in India to lead the issue by completely shutting their services for any kind of cryptocurrency trade. Soon after, most private and public sector banks followed. Currently, with almost all payment sources ending their association with the trading apps, the ownership of crypto assets seems to be a major grey area. It is because there is no clarity whether these millions of new investors that are signing up daily will be able to trade and make healthy profits using these applications.
After the last resort of payments for these three major trading apps – Paytm decided to part ways a couple of days earlier; the issue of being stuck with investments and not being able to monetize profits is having a negative impact. Moreover, these experiences play a major role in tampering with the community’s outlook on cryptocurrency trade, which had freshly started to grow with millions of new users joining the trade since the beginning of 2021.
Reportedly, The National Payments Corporation of India, which runs the Unified Payment Interface (UPI) services within the country, has refused to ban cryptocurrencies and has suggested that the banking institutions set up guidelines to effectively interact with the cryptocurrency trades. More than 1.5 crore Indians use the trading apps and transact in cryptocurrency tokens, which amount to over 15,000 crores. In March, Finance Minister Nirmala Sitharaman had clarified the issue saying there will be a well-calibrated approach to the cryptocurrency market in India. However, the banking and financial institutions have not cleared their take on the cryptocurrency trades and are yet to issue any regulations and guidelines to re-assign their services to the trade market.