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Paytm pulls plug on crypto-exchanges prompting shift to alternative models

After leading private sector banks began instructing payment gateway firms to block services to many Indian crypto-exchanges over the past month, Paytm Payments Bank had swooped in to rescue the exchanges. But it looks like the fear of regulatory action from the Reserve Bank of India (RBI) has now also pushed Paytm to pull the plug on servicing the exchanges through the payment gateway channels. Paytm Payments Bank began servicing crypto-exchanges like CoinDCX, WazirX, BuyUCoin, Zebpay and others over the past few weeks. The bank provided the exchanges with virtual nodal accounts, which are used by payments gateway providers to transmit funds from an investor's account to the exchanges'. Interestingly, while it was largely unreported that Paytm had rescued the crypto-exchanges, in the last few days many investors and stakeholders tweeted that Paytm was the new crypto anchor bank for many exchanges. This may have triggered Paytm to toe the same line that the large private banks are adhering to. MediaNama reached out to the crypto-exchanges named above for comments. Paytm declined to comment. Shift to alternative models In an email to investors late Thursday night, WazirX said that Rupee deposits to their account with Paytm Payments Bank would no longer be available from midnight. The exchange promised that any Rupee transactions to the Paytm account, after midnight May 20, would be reversed in 7 to 10 days. MediaNama has seen a copy of the email. The exchange has moved back to a Peer-2-Peer (P2P) model, wherein buyers of crypto-currencies…

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Reports on banking, payments, fintech and crypto-curencies. Additional reporting on media regulations, data protection and other areas.

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