Two major Indian cryptocurrency exchanges have reportedly halted deposits via a popular payment method, raising concern in a country that still lacks regulatory certainty despite bitcoin’s tremendous popularity.
News sources revealed that Indian crypto exchanges WazirX and CoinSwitch Kuber have disabled rupee deposits via the United Payment Interface (UPI) to buy cryptocurrencies.
UPI is a widely used real-time payment system in India regulated by the Central Bank. The total value of UPI transactions exceeded $1 trillion in the last fiscal year.
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In response to concerned users, the two exchanges said they will still be able to withdraw funds through the interface.
Coinswitch Kuber noted in a tweet:
“UPI deposit is currently disabled for all users, however we are making every effort to restore it as soon as possible. Please be patient.”
Concerns about financial stability
India, the second most populous country in the world, has spent years developing legislation to regulate cryptocurrencies, with a move being endorsed by the central bank over concerns about threats to financial stability.
CoinGecko data shows that the three largest Indian crypto exchanges have completed roughly $140 million worth of transactions in the last 24 hours.
Thursday’s actions follow a one-line statement last week from the National Payments Corporation of India, operator of the state-backed UPI system that facilitates bank transfers, in which it said it had no knowledge of its use by a cryptocurrency exchange.
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Indian crypto investors on the rise
In India, digital currency is extremely popular. Investing in Indian cryptocurrencies has grown in popularity over the past year and has grown into a multi-billion dollar market. Around 15 to 20 million people in the country own a cryptocurrency.
However, legal clarity is lacking in the country: India’s central bank earlier proposed banning cryptocurrencies, despite lawmakers enacting a 30 percent tax on gains from digital assets in February.
Some sources said that trading volumes have fallen precipitously under the new regulation, with volumes on WazirX, India’s largest exchange, falling by 71%.
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Frustrated
Investors took to Twitter to express their frustration as the exchange did not accept payment gateways from most major banks, including ICICI Bank and HDFC Bank.
“Without providing any information, you have disabled INR deposit. At least let us know how long the closure will last,” Avijit Debnath, a Twitter user, urged the exchange via the social media network.
CoinDCX, another major cryptocurrency exchange with over 10 million customers, also only accepted bank transfers but required a minimum deposit of 3,000.
CoinSwitch, which claims to have over 15 million users, did not immediately respond to a Reuters request for comment. In addition, the NPCI did not respond either.
Featured image from Daily Express, chart from TradingView.com