Indian Investors were left shocked after the two most prominent crypto exchanges CoinSwitch Kuber and WazirX have disabled rupee deposits for the purchase of cryptocurrency through a widely-used state-backed transfer network.
This has caused a massive public outcry as the clamor for regulatory clarity grows. The alarming development comes after the National Payments Corporation of India, operator of the state-backed United Payments Interface (UPI), which enables bank transfers, said it was unaware of its use by any crypto exchange.
Following the news, users took to Twitter to vent their frustrations. One user questioned the abrupt move saying that the platform should have informed beforehand. “CoinSwitch was not allowing users to load deposits on its app, although they could still withdraw funds. “You have closed the INR deposit without any information At least let us know how long it will be closed,” the tweet read.
Another posted a screenshot of their conversation with the customer service, apparently frustrated with the response. CoinSwitch, which reportedly has more than 15 million users, did not immediately respond to the development.
A source close to the matter said the decision by CoinSwitch to stop UPI acceptance was due to “regulatory uncertainty” after the NPCI statement. Another Indian trading platform WazirX also told users on Twitter, “UPI is not available,” adding that it had no estimated time limit to fix the issue.
In a statement, WazirX said its deposit facility via UPI had been put on hold in December but declined to elaborate. On April 1, Indian crypto users had raised alarm when the firm revealed that it was disabling rupee deposits via popular payments app MobiKwik “until further notice.”
Indian expert calls for regulatory clarity
In the month of February, India decided to tax income from cryptocurrencies and other digital assets at 30%, signaling that authorities recognized digital currencies, but refused to put them under a legal ambit dashing hope for millions of investors and the crypto industry in general.
Regulatory clarity is the need of the hour,” said Abhishek Malhotra, a founding partner of TMT Law Practice. “There are currently a lot of conflicting signals on the regulatory regime, leading to lack of certainty.”