Indian Banks are asking that the National Payments Corporation of India (NPCI) should provide them clarity about where it stands on the use of IMPS and UPI for crypto trading.
The concerns of the banks came to light following the NPCI’s declaration that banks must stop using UPI to trade cryptocurrencies. However, the banks subsequently met and collectively decided that the directives from NPCI are vague.
Recall that recently, several crypto exchanges such as WazirX, Coinbase, and CoinDCX started accepting UPI for crypto trading. But, that did not sit well with the NPCI, who started raising questions. Soon after, the payments body directed all banks to block UPI for crypto transactions.
Indian Banks Seek Directives on UPI support for Crypto
Meanwhile, according to a Monday report by Economic Times, Indian banks are now asking for clarity regarding the NPCI instructions. But yet, this clarity that the banks want so desperately, might not come anytime soon. In fact, an NPCI official is quoted as saying that, there are “no intentions of any circular.”
It might be important to note however, that India’s crypto industry will always put up a strong opposition to situations such as this. Like a banker told the Economic Times regarding the banning of UPI acceptance for crypto trading:
If there is a formal circular to ban UPI for cryptos or VDAs, whatever is the nomenclature, the crypto industry in all likelihood would legally contest it — as they had done when RBI imposed a ban in April 2018.
Perhaps NPCI Is Going Overboard
Meanwhile, bankers are also beginning to question the rights of a nonprofit company like NPCI to ban UPI. Recall that the payment framework is governed by none other than the Reserve Bank of India (RBI).
Furthermore, the NPCI also failed to clarify the use of IMPS for crypto trading. So, with all the uncertainties and lack of clarity of recent policies from the government and even the crypto exchanges, the crypto community of India remains in darkness.
As expected, the NPCI statement has brought about a massive decrease in the crypto trading volumes across all exchanges in India.