The Indian government has been toying with the idea of banning or regulating cryptocurrencies for a long time due to the risk and volatility. However, recently the government has decided to tax the income from cryptocurrencies and other digital assets.
WazirX on Wednesday said on Twitter that “UPI is not available,” and suggested users to make P2P payments instead, which have zero fees. The platform also said that it does not have an estimated time to fix the issue with UPI deposits. Meanwhile, uThe sevadars expressed their concern on social media. ,You have closed INR deposits without any information. At least tell us how long it will be closed,” Twitter user Avijit Debnath asked Coinswitch on the social media platform.
Nasdaq-listed crypto exchange Coinbase, which recently launched in India, has disabled crypto purchases “due to an ongoing issue with the UPI system”. The exchange further clarified: “Note that we do not support any other payment methods for purchasing crypto at this time.”
Crypto exchanges disable UPI deposits
An industry source familiar with the matter said that Coinswitch’s decision to halt UPI payments comes as a result of the NPCI statement post-math of “regulatory uncertainty”. Coinswitch Kuber and WazirX declined to comment officially on the matter.
The Indian government has decided to impose a 30 percent tax on income from cryptocurrencies and other digital assets, a move that is seen as a sign of acceptance of digital currencies by the authorities. Back in October, Coinswitch said it had raised over $260 million (roughly Rs. 1,980 crores) for a valuation of $1.9 billion (roughly Rs. 14,500 crores), underscoring the popularity of crypto trading.
Meanwhile, crypto trading volumes in India are on the decline after the implementation of a 30% tax on crypto income from April 1st. From July 1, 1% Tax Deducted at Source (TDS), will be applicable on crypto transactions as well. There is currently no official data on the size of the Indian crypto market, but the industry estimates investors to be between 15 million and 20 million, with holdings around Rs. 40,000 crore.