Indian crypto exchanges still struggling to secure banking partners
Commercial banks in India are reportedly reluctant to do business with crypto exchanges across the country.
According to the report by Reuters, crypto trading platforms in India are still finding it difficult to open accounts with financial institutions.
Despite there is no crypto ban in India, banks are reportedly acting on the advice of the Reserve Bank of India (RBI) to shun cryptocurrency exchanges.
The RBI clarified its position back in May, stating that there was no prohibition against banks servicing crypto exchanges. Indeed, the Supreme Court overturned a previous RBI rule that prevented banks from offering account services to crypto trading platforms.
Following the bank’s shun, crypto exchanges in India have begun to consider alternative payment providers. Collaborating with payment processing firms is becoming a suitable stop-gap measure for platforms looking to continue offering crypto/fiat trading pairs.
Smaller payment rails like the Mumbai-based Airpay is providing instant transfer services for exchanges like Coinswitch and Binance-owned WazirX.
Major companies including WazirX are having to halt crypto/fiat trading on certain days with only peer-to-peer (P2P) transactions available. Some other exchanges are reportedly resorting to manual settlements for bank deposits and withdrawals.
With uncertainty on the regulatory framework for cryptocurrencies in the country, exchanges may likely continue to experience such struggles. The government is currently weighing its options regarding the best approach to regulating crypto.