CoinSwitch Kuber and WazirX, two Indian cryptocurrency exchanges, have prohibited consumers from purchasing cryptocurrencies with rupee deposits.
CoinSwitch Kuber has 15 million users and currently allows users to withdraw rupee funds, but does not let users deposit rupees on the platform.
While platform users have encouraged the exchange to inform them of the length of the outage, competitor exchange WazirX has stated that it does not have a time frame for resolving the issue.
The decision was made due to regulatory uncertainties, according to Reuters. The operator of the government-backed United Payments Interface (UPI), the National Payments Corporation of India, claimed last week that it was unaware of crypto transactions utilising the UPI, which is a widely used state-backed transfer network meant to ease transfers between banks.
India’s Finance Bill 2022
The Finance Bill 2022, which includes taxation on digital assets such as cryptocurrency, was passed by India’s parliament and enacted on Apr. 1.
In February, India opted to tax income from cryptocurrencies and other digital assets at 30%, signalling that authorities accepted digital currencies, but regulatory uncertainty has weighed on the industry.
“Regulatory clarity is the need of the hour,” Abhishek Malhotra, Founding Partner of TMT Law Practice, said. “There are currently a lot of conflicting signals on the regulatory regime, leading to lack of certainty.”
India’s budding crypto industry
CoinSwitch said in October that it has raised over US$260 million for a valuation of US$1.9 billion, highlighting the growing popularity of cryptocurrency trading.
Meanwhile, Coinbase, the world’s largest cryptocurrency exchange, announced on Thursday that its trading services are now available in India. According to the publicly traded company, it is seeking to expand its product offerings in the country.
Although there is no official data on the size of the Indian crypto market, industry estimates say that there are between 15 and 20 million investors, with total holdings of over 400 billion Indian rupees (US$5.25 billion).