The Indian cryptocurrency traders are currently dealing with financial anxiety and panic. The FUD is the result of two major crypto exchanges revoking deposit privileges for their users. Both these major crypto exchanges are unable to keep the option open for their consumers due to the absence of third-party payment providers.
The Indian government held a dialogue with the biggest cryptocurrency stakeholders in the region last year to discuss the matter of crypto regulations. However, to this day, there is an acute shortage of crypto-related legislature and legal frameworks. Some local media outlets claim that the biggest crypto markets like CoinSwitch Kuber and WazirX have also stopped accepting Indian rupee deposits due to the unavailability of the United Payment Interface or UPI.
The Central Bank of India assumed a defensive position towards the increasing popularity of cryptocurrencies like Bitcoin in the region from the very beginning. However, it seems now that the RBI is leaning towards offensive measures. According to the Indian media outlets, UPI is a universal digital payments system that is regulated by the Central Bank.
Indian citizens conduct $1 trillion worth of transactions per year on average using UPI. CoinSwitch Kuber claimed that the company is in the process of restoring the UPI deposit channels and asked the consumers to remain patient. On the other hand, withdrawal options are still open for the digital currency investors of India.
Indian Government has Strict Policy Towards Crypto Industry
Many countries in the world are struggling with the question of cryptocurrency regulations. As the second most populated country in the whole world, India has attracted many major cryptocurrency exchanges to take hold of its emerging crypto markets. However, RBI, the central banking authority, has aired warnings about the dangers to traditional currencies and financial stability time and again.
Recently, the Indian Finance Minister imposed a 30% income tax on the crypto sector. The addition of the crypto sector to the taxonomy laws started to create issues for the nascent industry growth. CoinGecko tracker measured that $140 million worth of crypto trades occurred in 3 major crypto markets following the tax announcements. Meanwhile, NPCI, or National Payments Corporation of India, recently issued a statement waving off involvement and knowledge of the UPI blockade.