The National Payments Corporation of India (NPCI), which is an umbrella body for retail payments, won’t be blocking cryptocurrency trades, Inc42 reported. Instead, it plans to leave the decision up to individual banks, letting them determine their own level of risk.
This development comes at a time when some banks have blocked the occasional crypto transaction or investment, the report stated.
“If NPCI had taken a central decision to disable UPI and RuPay cards for investing in cryptos, it would have applied to all banks uniformly and left investors with fewer payment options,” an industry official said, according to the report. “Customers of banks which have disabled crypto cannot anyway use facilities like UPI, net banking or cards. However, trades continue to happen as many banks are still allowing. It’s unclear how long they will continue to.”
The stance of NPCI is significant, according to the report, as some Indian banks have instructed payment gateway operators to shut off their net banking facilities to those transacting in crypto.
Nischal Shetty, co-founder and CEO of Mumbai-based crypto exchange WazirX, has spoken about the confusion in India’s banking industry, saying it is “hurting 1.5 CRORE Indians in Crypto,” the report stated.
“The Honourable Supreme Court of India has set aside RBI crypto circular of 2018,” he wrote on Twitter Tuesday (May 4). “Banks in India still cite that circular to deny banking.”
Shetty was referring to the Reserve Bank of India’s (RBI’s) 2018 decision to block banks from serving crypto companies, according to the report. That decision was struck down in March 2020 by the Supreme Court, which called it unconstitutional.
Earlier this year, India considered fulling banning cryptocurrency. The proposed regulations were among the strictest in the world, outlawing possession, issuance, mining or trading of cryptocurrency. The move was in line with India’s intent to ban private digital assets while working on its own individual currency.