Indian crypto investors are in panic mode as bitcoin exchanges deactivate deposits
According to reports, two large Indian cryptocurrency exchanges have stopped deposits via a popular payment method, causing worry in a country where regulatory certainty is still lacking despite Bitcoin’s enormous popularity. Indian crypto exchanges, CoinSwitch Kuber and WazirX have joined the bandwagon of disabling rupee deposits using the United Payments Interface (UPI) for buying.
CoinSwitch Kuber which has more than 15 million users, was not allowing users to load deposits on its applications, although, withdrawals of funds were still allowed. Rival WazirX through its Twitter account informed its users that UPI is not available. It also added that they had no estimated time limit to fix the issue.
UPI is a widely used real-time payment system in India that is regulated by the central bank. The total value of UPI transactions exceeded US$1 trillion in the last fiscal year.
Worries about Financial Stability
India, the world’s second-most populous country, has spent years developing legislation regulating cryptocurrencies, with a measure endorsed by the central bank because of concerns about financial stability hazards, yet a recent decision to tax cryptocurrency income indicates approval by authorities. CoinGecko data show the top three Indian crypto exchanges completed approximately US$140 million in trades in the last 24 hours.
Thursday’s actions follow a one-line statement last week by the National Payments Corporation of India, the operator of the state-backed UPI system that facilitates bank transfers, in which it stated that it did not know its use by any cryptocurrency exchange.
Earlier this month, popular payment service Mobikwik also stopped providing services to crypto exchanges. Meanwhile, crypto trading volumes have been plummeting in India after the 30% tax on crypto income went into effect without allowing loss offsets or deductions on April 1. On July 1, another damaging tax, a 1% tax deducted at source (TDS), will start levying on crypto transactions.