Coinbase, the well-known crypto exchange, recently announced they would be halting support for UPI deposits, given a recent statement by NPCI. This step has created quite a stir in the Indian crypto market.
The Announcement After the NPCI Statement
Coinbase announced to halt UPI deposits in India after the National Payments Corporation of India (NPCI) issued an NPCI Statement saying that only banks can offer an interoperable payments solution. Coinbase said they will suspend UPI deposits on their platform until further notice.
The company said that this suspension would not affect existing customers, and they can continue to deposit funds into their Coinbase accounts via other methods. However, new users will not be able to deposit funds into their accounts using UPI till the suspension is lifted. UPI Deposits were touted as one of the easiest ways to deposit money into your account. The NPCI statement did not mention anything about crypto exchanges being banned from offering UPI as a payment method but only mentioned certain restrictions on peer-to-peer transactions between individuals.
This is likely due to pressure from the Indian government. The Reserve Bank of India (RBI) has been trying to ban cryptocurrency exchanges in the country for over two years, but it has failed multiple times due to court rulings against its position. RBI recently tried again by asking payment processors like NPCI to stop working with crypto companies but could not get them on board.
If you are a cryptocurrency investor in the Indian crypto market, this arbitrary move by Coinbase to halt UPI deposits of cryptocurrency might be frustrating for you. Hopefully, the situation will resolve itself soon, and they will start deposits again.
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