Indian banks have demanded an explanation from the National Payments Corporation of India (NPCI) on the usage of UPI and IMPS for cryptocurrency trading.
At a recent meeting, banks voiced concerns about the absence of clear guidelines from NPCI after the payments agency requested banks to discontinue using UPI for cryptocurrency trading.
The NPCI questioned the use of UPI for cryptocurrency trading after multiple crypto exchanges, including Coinbase, WazirX, and CoinDCX, recently began accepting UPI for cryptocurrency trading.
Indian banks request UPI integration for cryptocurrency
In a recent meeting, Indian banks urged the NPCI to clarify its stand on the use of UPI for cryptocurrency trading after it advised banks to restrict UPI for cryptocurrency transactions.
“The crypto community would dispute if a legal document was issued to restrict UPI transactions for cryptocurrency. Earlier they did when RBI enforced a ban in April 2018,” a banker on UPI acceptance told the Economic Times.
Bankers have also criticised the authority of nonprofit NPCI to restrict UPI, as the payment structure is controlled by RBI. Furthermore, the NPCI has not provided any clarification regarding the usage of IMPS for cryptocurrency trading.
Cryptocurrency Status after NPCI announcement
After the government announced a 30% tax and 1% TDS on cryptocurrencies, the approval of UPI provided some respite to the crypto community. However, the NPCI announcement resulted in a huge drop in cryptocurrency trading volume across Indian exchanges.
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