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Two major Indian cryptocurrency exchanges CoinSwitch Kuber and WazirX have disabled the function of making deposits in rupees through the payment system UPI due to regulatory uncertainty. It is reported by Reuters.
On April 7, the American exchange Coinbase announced its entry into the Indian market. AT During the presentation, the company’s product director Surojit Chatterjee called the use of UPI the first step to buy digital assets on the platform.
The Real Time Mobile Payment System is developed by the National Payments Corporation of India (NPCI) to facilitate interbank transactions and is regulated by the Reserve Bank of India.
On the same day, the NPCI stated that it was “not aware of any cryptocurrency exchange using UPI.”
Statement by NPCI as on 7th April 2022. With reference to some recent media reports around the purchase of Cryptocurrencies using UPI, National Payments Corporation of India would like to clarify that we are not aware of any crypto exchange using UPI. Please see attached document pic.twitter.com/lGTcaSLKeC
— NPCI (@NPCI_NPCI) April 7, 2022
According to the media, Coinbase has disabled UPI support.
An industry source confirmed to Reuters that CoinSwitch has decided to close the system deposits option due to regulatory concerns following the NPCI announcement. Users can still withdraw funds.
WazirX also informed customers that “UPI is not available”. Like CoinSwitch, the exchange has not set a timeline for restoring options. In a statement, WazirX clarified that deposits through the payment network were disabled back in December.
On April 1, the company announced that it would close this feature “indefinitely” and through the popular mobile app MobiKwik.
📢 Update on INR deposits via MobiKwik
Effective 1st April 2022, 8 PM IST, INR deposits via MobiKwik will be temporarily disabled until further notice. Meanwhile, we are working to bring more INR deposit options & request you to use Net Banking & P2P.
Thanks for your support 🙏
— WazirX: India Ka Bitcoin Exchange (@WazirXIndia) April 1, 2022
On this day, a 30% tax on income from operations with crypto-currencies came into force in India. Earlier, the Ministry of Finance noted that the introduction of taxation does not determine the legal status of digital assets – this is the prerogative of the relevant legislation.
“Regulatory clarity is an urgent need. There are currently many conflicting signals about the regulatory regime, leading to a lack of certainty,” said Abhishek Malhotra, founding partner of TMT Law Practice.
In recent years, statements by the Indian authorities regarding legislative initiatives on cryptocurrencies have ranged from a complete ban on digital currencies, even with criminal liability, to possible regulation as assets.
According to industry experts, there are between 15 million and 20 million investors in the country’s crypto market with a total asset value of about 400 billion rupees (~$5.25 billion).
Recall, CoinSwitch said that in 2021 its user base increased 14 times and exceeded 14 million.