Deposits of Indian Rupees (INR) via UPI and other methods, including bank transfers, wire transfers, and NEFT, have been halted
A statement has come up this morning: We have disabled INR deposits temporarily as “there is an issue from our banking partner's side”. We regret the inconvenience caused due to this. Our team is looking to solve this on priority, and we will update here as soon as INR deposits are enabled.
CoinSwitch Kuber, a cryptocurrency exchange, has prohibited all ways of transaction for cryptocurrency purchases on its portal, including bank transfers. This comes only two days after Coinbase had to shut the Unified Payments Interface (UPI), which was the only way to buy cryptocurrency on its network.
On CoinSwitch's app, too, deposits in Indian Rupees (INR) via UPI, as well as other means like bank transfers, have been halted, possibly leaving no way to fill the app's wallet to buy cryptocurrency. This will have a substantial influence on the platform's trading activity, which will have more than 14 million users by 2021.
Moneycontrol contacted CoinSwitch with questions, and a promising answer is forthcoming.
Since the government announced its plan to slap a 30% tax on cryptocurrency earnings, which went into effect on April 1, crypto exchanges in India have been on the radar.
Since then, payment method choices on exchanges have been dropping, with Mobikwik, the lone wallet over several platforms, withdrawing its services from April 1.
This was followed by Coinbase establishing crypto trading services in India, which it unveiled at a massive event at which it stated that clients will be able to make purchases via UPI. However, the National Payments Corporation of India (NPCI), which oversees UPI, stated the same day in a statement that it is not aware of any crypto platform that is using UPI.
Soon later, Coinbase deactivated the UPI function, giving it no way of obtaining virtual currency on its site. Coinbase Ventures, the NASDAQ-listed company's investment arm, has also invested in CoinSwitch and CoinDCX, India's only two unicorn cryptocurrency exchanges.
Trading volumes in India have also fallen after April 1, owing to concerns about taxes and Mobikwik's removal of its wallet. According to statistics given by research company CREBACO, volumes decreased by more than 50% in the previous week, according to Moneycontrol on April 11.
Moneycontrol reported previously that trading volume fell 55% and network traffic slumped 40% on India's leading cryptocurrency exchanges in the first two days after the crypto tax went into force.
This is projected to fall even more once the 1% TDS (tax deduction at source) is implemented on all cryptocurrency operations on July 1.
