Indian government’s plans to legislate cryptocurrency and effectively ban them is currently in Limbo after NPCI (National Payments Corporation of India), the authority that administers UPI payments in the country refused to ban payments through UPI to cryptocurrency exchanges.
The decision by the regulatory authority to allow payments for crypto transactions contradicts the pertinent government’s stand which earlier this year proposed a legislation to ban cryptocurrencies.
Indian banks, following the RBI guidelines have been restricting payments to cryptocurrency exchanges and other payments related to cryptocurrencies. The NPCI’s decision to allow cryptocurrency related payments will have a significant impact on the India crypto market. It is indeed being welcomed by the crypto community in India.
The regulatory authority is based on an earlier decision from the Supreme Court of India which did allow banks to be absolved from the liability of following the Reserve Bank’s guideline to ban cryptocurrency payments. The apex court had said that banks cannot ban or seize payments of companies and financial institutions dealing in cryptocurrencies or digital tokens.
The latest decision from the NCPI leaves Indian government’s plans to ban cryptocurrencies in limbo and it will have a long-term impact. It is clear that banning cryptocurrency in India will not be easy after this. In the meanwhile the number of cryptocurrency users and exchange in India is growing consistently.