TronWeekly

Crypto World News

You are here: Home / Archives for indian banks

indian banks

Indian Banks Approach NPCI to Receive Clarity on Crypto UPI Payments

by

Banks in India have contacted the National Payments Corporation of India (NPCI), a government agency under India’s Central Bank Reserve Bank of India that is responsible for operating retail payments and settlement systems in the country.

They contacted NPCI to clarify the relationship between cryptocurrencies and the country’s Unified Payments Interface (UPI) platform.

Local banks recently convened to request that the National Payments Corporation (NPCI) issue a formal guideline prohibiting the use of UPI payment systems for buying and selling digital assets.

The decision comes after Coinbase, a US-based crypto exchange recently opened its crypto trading services in the country and declared that its CEO, Brian Armstrong, would accept UPI payments for crypto transactions.

The ambiguous crypto situation in India

On April 7, Coinbase began offering trading services in India. Following that, it announced that users in the country would be able to purchase cryptocurrencies through the UPI system.

The NPCI fined Coinbase as a result of this, and the authority investigated the company. Shortly after, the National Payments Corporation (NPCI) made an official statement explaining that it is not aware of any cryptocurrency exchange in the nation that uses UPI.

Following the NPCI’s explanation, all major crypto exchanges in the country blocked UPI payments on their sites, including billion-dollar firms CoinSwitch Kuber and CoinDCX.

Major banks have purportedly suspended all online banking alternatives for crypto transactions.

Banks have now requested official guidance from the NPCI on how to proceed with adopting the UPI system for cryptocurrency transactions.

According to sources, the NPCI is unlikely to release any of these orders very soon.

NPCI refused to limit money transfers for cryptocurrency trading in May of last year instead of leaving it up to individual banks to assess their own risk threshold.

Banks in the country were prohibiting various crypto exchange and investment transactions during that time.

The NPCI’s newest statement, released earlier this month, has reignited the tense relationship with cryptocurrency exchanges. Local banks are now hesitant to supply crypto exchanges with deposit channels.

The use of cryptocurrencies by 20 million Indians is being harmed by confusion in the banking system. India’s supreme court overturned the RBI (Reserve Bank of India 2018) decision to prohibit banks from providing services to crypto businesses in March 2020.

Indian Banks Hesitating to Embrace Crypto Industry Albeit RBI Consent

by

The Reserve Bank of India (RBI) reversal of the outright crypto-currency ban in March was a gift to the flourishing Indian crypto-industry. The country’s emergence of new exchange platforms has been the incentive to the industry ‘s steady and healthy growth.

While India is one of the most affected nations by the coronavirus pandemic, this significant growth is noticeable. Indeed, the epidemic has led to a downward economic disaster across the nation. In such crisis-ridden times, blockchain and digital currencies have proved the desperately needed remedy for both investors and fintech ground-breakers alike.

Crypto regulatory wariness

Nevertheless, lifting the blanket ban seems was not the ultimate solution to the regulatory uncertainty that most had hoped to be. There have been alleged incidents where Indian banks have denied financial services to crypto-related firms. The good thing is that the industry has a more explicit regulatory structure than there was in 2017; the extent of cynicism and turmoil was sky-high.

Notably, a rumour emerged within the Indian Ministry of Finance for interdepartmental consultation on a law proposing all crypto operations to be abashed. The draft law proposal involved a heavy financial penalty for guilty individuals and a prolonged prison sentence. Recently, the rumour was refuted.

According to a business consultancy firm, AKM Global, if the proposal for a blanket ban passes into law in its current fashion, it would “completely decimate the crypto-industry in India.” Rumor has aroused the already fading fears in the crypto-currency industry in India. Regardless of the recent rumors, Nischal Shetty, CEO of WazirX, still maintains confidence with the government.

An email sent to Cointelegraph’s crypto media outlet quoted:

“On the day the news about the ‘note’ broke out, it created some panic among the community. But that’s all. We are not seeing any difference in the trading behaviour on WazirX since then. There have been speculations about crypto ban in the past as well. With more than 5 million crypto users in India, I’m confident that our Prime Minister won’t let us down.”

Indian Banks reluctance to embrace crypto industry

In addition to RBI, certain private commercial banks in India have refused to process cryptocurrency transactions. However, a large percentage of speculations suggest the reason why the cryptocurrency sector lacks knowledge; as noted within various government bodies.

Siddharth Sogani, the founder of Crebaco research firm, believes that there may be further conflicting interests at play. According to him, “Banks will always be globally opposed to this industry because if crypto comes into action; P2P transactions will eliminate the need for third-party bankers.”

Regardless, in response to a request for information from the co-founder of the crypto exchange Unocoin, Harish BV, the RBI did not, in fact, indicate any limitations on banks offering crypto-related companies and individual traders to account. This was the major RBI statement that presumably banks were waiting for, but the actual quantifiable effects remain.