scorecardresearchPayment gateways keep cryptocurrency transactions at bay

Payment gateways keep cryptocurrency transactions at bay

Updated: 27 Apr 2022, 09:26 AM IST
TL;DR.

The move follows RBI’s serious reservations about payments made for digital currencies

Recently, NPCI issued a clarification that it is not aware of any crypto exchange using UPI.

Recently, NPCI issued a clarification that it is not aware of any crypto exchange using UPI.

After crypto exchanges’ tryst with Unified Payments Interface (UPI), where they had to disable rupee deposits through the payment platform, payment aggregators have also followed suit by not powering crypto exchanges and transactions, reported Business Standard.

This comes in the wake of the central bank’s serious reservations around such assets.

“Payment gateways are avoiding powering crypto exchanges. The payment gateways have not been working with the crypto exchanges for a long time, except for one or two small payment gateways,” said Vishwas Patel, executive director of Infibeam Avenues.

He said, it’s a conscious decision because RBI has unresolved concerns with cryptocurrencies and exchanges.

Keeping that in mind, banks and other players are also not allowing crypto merchants. “None of the crypto exchanges have payment gateways to power their transactions through credit card or debit cards. They are using IMPS and NEFT for their transactions. Payment aggregators, networks and banks are licensed and regulated by the RBI. And, RBI is against crypto. So, we are staying away from crypto exchanges,” Patel added.

Recently, National Payments Corporation of India (NPCI) issued a clarification that it is not aware of any crypto exchange using UPI. That happened after Coinbase, America’s largest crypto exchange, said the users can carry out transactions via UPI.

ALSO READ: Crypto exchanges see massive fall in trading volumes after UPI payments halted

Following this, a slew of crypto exchanges that were giving the option of rupee deposits using UPI, also disabled it.

Meanwhile, a few banks that are shareholders of NPCI, have asked the payments’ body to come up with a formal directive on the usage of UPI for buying and selling cryptocurrencies.

So far, the payments body, apart from the clarification it issued, has not come out with any formal circular barring the use of UPI for such transactions.

“These exchanges use different names for merchant ID and use the payment services. Once that is closed down, they come up with other merchant IDs. While the government has decided to tax crypto transactions, it has still not brought any legislation on the legality of cryptocurrencies,” Patel said.

First Published: 27 Apr 2022, 09:26 AM IST