The National Payments Corporation of India (NPCI), which is an umbrella body for retail payments, will not block cryptocurrency transactions, Inc42 reported. Instead, he plans to leave the decision to individual banks, letting them determine their own level of risk.
This development comes at a time when some banks have blocked the transaction or the occasional crypto investment, according to the report.
“Had NPCI made the central decision to deactivate UPI and RuPay cards for investing in cryptos, this would have applied to all banks equally and left investors with fewer payment options,” said an official at sector, according to the report. “Customers of banks that have deactivated crypto cannot use facilities like UPI, net banking or cards anyway. However, transactions continue to occur as many banks still allow. It is not known how long they will continue. “
NPCI’s position is significant, according to the report, as some Indian banks have asked payment gateway operators to shut down their net banking services to those who transact in crypto.
Nischal Shetty, co-founder and CEO of Mumbai-based crypto exchange WazirX, spoke about the confusion in India’s banking industry, saying it “hurts 1.5 CRORE Indians in Crypto,” the report says.
“The Honorable Supreme Court of India quashed the 2018 RBI crypto circular,” he wrote on Twitter Tuesday (May 4). “Indian banks always cite this circular to deny banking transactions.”
Shetty was referring to the Reserve Bank of India‘s (RBI) 2018 decision to prevent banks from serving crypto firms, according to the report. This decision was overturned in March 2020 by the Supreme Court, which declared it unconstitutional.
Earlier this year, India considered banning cryptocurrency altogether. The proposed regulations were among the strictest in the world, banning the possession, issuance, mining or trading of cryptocurrency. The move was in line with India’s intention to ban private digital assets while working on its own individual currency.
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