Choices of payments in Indian rupees at cryptocurrency exchanges are dwindling, with an increasing number of cryptocurrency exchanges disabling deposits in the Indian currency using the Unified Payments Interface (UPI) system, which is the most widely used retail payment method.
For one, crypto exchange Wazirx is not offering UPI support. The exchange tweeted on 13 April, “Currently, UPI is not available.” Coindcx is also not supporting payments by UPI, saying on Twitter on 11 April, “UPI is temporarily unavailable.”
Coinswitch Kuber went a step further, users say, suspending all Indian rupee deposit services Wednesday, including UPI and bank transfers via NEFT, RTGS, and IMPS. Coinswitch is a major cryptocurrency trading platform in India with over 15 million users.
The recently launched Nasdaq-listed Indian crypto exchange Coinbase has disabled crypto purchases “due to an ongoing issue we’re experiencing with the UPI system.” The exchange clarified: “Note that we don’t support another payment method to buy crypto at this time.”
These cryptocurrency exchanges ceased to support UPI payments after the National Payments Corporation of India (NPCI) said that it was not aware of crypto exchanges using the UPI system. The NPCI statement came after Coinbase launched in India and advertised that users could easily deposit funds using UPI to buy cryptocurrencies.
A source told Forkast publication that the NPCI was caught between a rock and a hard place when Coinbase claimed to launch with UPI support. “Once the launch of Coinbase happened in India and they announced the usage of UPI as a payment option, NPCI realised it needed to put a clarification out there,” the person said.
Earlier in April, popular payment service Mobikwik also stopped providing services to crypto exchanges.
Meanwhile, crypto trading volumes have been plummeting in India after the 30% tax on crypto income went into effect without allowing loss offsets or deductions on the All Fool’s Day, 1 April. On 1 July, another damaging tax, a 1% tax deducted at source (TDS), will start levying on crypto transactions.