Cryptocurrency exchanges raise alarm by prohibiting deposits through state-supported system

Prominent cryptocurrency exchanges WazirX and CoinSwitch Kuber have blocked rupee deposits for the buying of crypto using a widely-used state-fostered transfer system, provoking users to voice concern on social media.

India has spent years on a law to regulate or ban cryptos, with its central bank supporting a ban over their threat to financial stability, but a recent decision to tax income from them recommends acceptance by authorities.

The decision comes after one-line statement the previous week by the National Payments Corporation of India stating, it was not aware of any cryptocurrency exchange utilizing its United Payment Interface (UPI) system, which simplifies bank transfers.

According to an industry source with direct knowledge of the issue, the stance by CoinSwitch to stop UPI acceptance stem from the ‘regulatory uncertainty’ post the NPCI statement. However, the NPCI didn’t reply immediately.

In February, India decided to tax income from cryptos and other virtual assets at 30%, indicating that authorities accepted digital currencies but uncertainty over regulation has weighed on the industry. No official info is available on the size of the Indian cryptocurrency market, but industry estimates recommend investors count from 15-20 million, with total holdings of about $5.25 billion.

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