Major Indian Crypto Exchanges Halt Deposits Amid Regulatory Uncertainty: Report

Two major Indian cryptocurrency exchanges have disabled deposits via a popular payment system, according to reports, sparking alarm in a country that still lacks regulatory clarity despite Bitcoin being hugely popular there.

Users on Wednesday were unable to deposit cash via the United Payments Interface (UPI) to buy cryptocurrency on the CoinSwitch Kuber and WazirX exchanges, Reuters reported. UPI is a popular real-time payment system regulated by India’s central bank. 

Reuters added that users complained about the lack of clarity from the exchanges on why the halt happened, but said that CoinSwitch halted UPI acceptance due to “regulatory uncertainty”; WazirX said its deposit facility via UPI had been disabled back in December.

The National Payments Corporation of India (NPCI) last week issued a statement saying that it was not aware of any crypto exchange using its UPI framework. 

Decrypt reached out to both exchanges via email and Twitter to ask for further details but had not received a response by the time this story was published. 

Cryptocurrency is hugely popular in India, the world’s second-most-populous country. Crypto investments have surged in the past year to become a multi-billion-dollar market. The country’s top three exchanges processed over $139 million worth of trades in the past 24 hours, according to CoinGecko. 

But there is little regulatory clarity in the country: India’s central bank previously proposed a ban on cryptocurrency, though lawmakers in February passed a 30% tax on income from digital assets. Trading volume dipped massively following the new law, according to reports, with The volume on WazirX, the country's largest exchange, dropping by 72%.

Moreover, since the beginning of this month, companies in India also legally have to declare their crypto holdings. 

Shaktikanta Das, the governor of the Reserve Bank of India, said in February that private cryptocurrency “is a big threat to our macroeconomic stability and financial stability.”