Crypto-investors in India took to social media over the weekend to complain that they could not deposit funds into their crypto-wallets, hosted by domestic crypto-exchanges for trading purposes. Most exchanges have now disabled direct bank deposit functions on their platforms due to integration issues between a payments gateway provider and the banks supporting the exchange, three industry sources told MediaNama on the condition of anonymity. From early March onward, leading private banks in the country began blocking their account and payment services to crypto-exchanges in the country. The decision to shut services to crypto-exchanges was prompted by informal communication from the Reserve Bank of India (RBI) on the risks of crypto-transactions. Further, industry sources said that bank compliance teams are now over-burdened with questions surrounding their depositors' payments to crypto-exchanges. As a result, legal and compliance teams at banks have also influenced the banks' decision to stop servicing crypto clients. That said, a few private banks continue to support crypto-exchanges. As crypto-exchanges had to transition to a new anchor bank, their payment gateway provider had to re-engineer the payment pipelines to these exchanges. These payment pipelines include platforms like Unified Payment Interface (UPI), Immediate Payments System (IMPS), the National Electronic Fund Transfer (NEFT), Real Time Gross Settlements (RTGS) and other systems. As a consequence, UPI is no longer supported by many leading crypto-exchanges. Prior to the current spate of issues, UPI was widely used by crypto-investors to deposit and withdraw funds. While some crypto-exchanges are now supporting UPI, they are…
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