Major Indian Exchanges Stopped Deposits Amid Regulatory Uncertainty

Major Indian exchanges stopped deposits amid regulatory uncertainty and the move risks confusing the crypto population as policymakers debate how to regulate the sector as we can see more today in our latest cryptocurrency news.`

Two major Indian crypto exchanges stopped deposits via a popular payment system and sparked alarm in the country which lacks regulatory clarity despite BTC being popular. The users on Wednesday were unable to deposit cash via the United Payments Interface to purcahse crypto on the CoinSwitch Kuber and WazirX exchanges and UPI is quite a popular real-time payments system that is regulated by the India’s central bank.

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

Reuters added that the users complained about the lack of clarity from exchanges and why they halted the operations but said that CoinSwitch stopped UPI acceptance because of regulatory uncertainty with WazirX saying the deposit facility via UPI has been disabled in December. The National Payments Corporation of India issued a statemetn saying that it was not aware of exchanges using the UPI framework. Crypto is quite popular in India the world’s second-most populous country and the crypto instruments surged in the past year to become a multi-billion dollar market with the country’s main exchanges processing over $139 million worth of trades over the past day.

There’s little regulatory clarity in the country, India’s central bank proposed a ban on crypto but the lawmakers passed a 30% tax on the income from crypto assets and the trading volume dipped a lot after a new law with the Volume on WazirX dropping by 72%. since the start of the month, companies in India declared the crypto holdings. The governor of the Reserve Bank of India said that privacy cryptocurrency is a huge threat to macroeconomic stability and the financial stability.

As recently reported, India’s crypto trading volume crashed on April 1^st and the day the new tax law came into effect as per the data from Crebaco, the crypto research organization. The volumes of four Indian exchanges were collated by Nomics and CoinMarketCap as the data noted. The data reveal a drop of 72% on WazirX, CoinDCX 52%, Zebpay 59%, and 41% on BitBns while the trading volumes were in US dollars. India’s crypto tax law enforcing 30% tax on the profits from crypto transactions came into effect on April 1^st but it doesn’t allow setting off losses from the crypto transactions. The most controversial provision and a 1% tax deducted at source ability will not happen until July 1^st.