Fiat Deposits Disabled by Top Indian Crypto Exchanges

According to media sources, the two largest Indian crypto exchanges, COINSWITCH Kuber and WazirX ceased accepting deposits from Indian investors on Tuesday due to regulatory issues. After discovering that their trading platforms had disabled deposit options for Indian rupees, Indian crypto investors were bewildered.

According to sources, these exchanges are in discussions with the government, which is requesting a clear regulatory environment. Investors will not be able to deposit Indian rupees till that time comes.

The National Payments Corporation of India (NPCI), a central bank-controlled umbrella entity with a variety of products in retail payments and settlement systems, including UPI, has denied crypto exchanges access to its Unified Payments Interface (UPI) service. The NPCI refuses to provide services to crypto exchanges, citing the RBI’s position that cryptocurrencies are not legal tender in India and hence cannot be used as money.

The issue was brought to a head when NPCI denied Coinbase’s claim that Indian investors could utilize UPI to make rupee deposits. Soon after Coinbase launched its trading service in India on April 7, the National Payments Corporation of India (NPCI) issued a statement saying it was unaware of any crypto exchanges that used UPI.

Coinbase halted the deposit option three days after its India launch on Sunday as a result of this.

Following the NPCI declaration on April 7, MobiKwik an e-wallet service stopped its service, and crypto exchanges were unable to function normally. And likewise ceased serving Indian crypto consumers. MobiKwik and other payment aggregators used UPI, which was being used by crypto investors to get over the NPCI’s crypto exchange ban.

Following the implementation of crypto taxes on April 1, 2022, Indian crypto exchanges have seen a significant drop in transaction volume and site traffic. The Economic Times stated on April 10 that transaction volume has dropped to its lowest level in six months, with a significant 92-98 percent drop when compared to the previous year.