Crypto payments have frozen in India after crypto exchanges disabled support for payments made via united payments interface (UPI) over regulatory uncertainty.
The UPI payment option was suspended by several crypto exchanges after the National Payments Corporation of India (NPCI) said that was ‘not aware of any crypto exchange using UPI’.
The NPCI’s statement was in response to Coinbase’s claim that its users will be able to use UPI for buying and selling crypto on its platform.
Coinbase, which expanded its operation to the country this month, disabled the UPI options within days of the regulator’s statement.
The US-based crypto exchange said it will work with NPCI and other relevant authorities to ensure its operations are in line with local expectations and industry norms.
CoinSwitch Kuber and WazirX are said to be among the other crypto exchanges that disabled rupee deposits for the purchase of cryptocurrency through UPI, according to multiple reports.
Mobikwik wallet, which had partnerships with major crypto exchanges, has also ceased its support for crypto trading.
At least six cryptocurrency exchanges in the country were said to be providing Mobikwik e-wallet option for their investors.
These developments have further increased the pressure on already failing trading volumes in the country.
Daily trading volumes on crypto exchanges in India were by fell between 88% and 96% since touching peak point last year, according to a report by Bloomberg Quint.
In 2018, India’s central bank issued a directive to lenders to stop collaborating with digital asset companies.
Although the country’s Supreme Court reversed that directive in 2020, some lenders were hesitant to work with crypto firms, partially because top officials of the Reserve Bank of India (RBI) kept calling out for a ban on cryptocurrencies.
Earlier this year, RBI deputy governor T Rabi Sankar said that Ponzi schemes set up by charlatans are actually superior “from a social perspective” to bitcoin, ether and the rest.