Cryptocurrency exchange has been hugely affected in India due to some regulatory pressures and a broadening bank clampdown.
The representatives have been claiming that In the last 2 months the trade of bitcoin has dropped as much as 90%. Cryptos are considered illegal tender in India and authorities have demonstrated a negative attitude towards their usage. Simultaneously the leading Indian banks have taken smart actions to limit exchange operations even before any rule is made mandatory for adopting these policies.
Regulatory Uncertainty, Hostile Attitude
Trading platforms in India have suffered from uncertainty about the future of cryptocurrencies in the country. Delhi authorities have issued multiple warnings and have threatened to stifle the use of digital money for illicit purposes. They have been continuously stating that cryptos, like bitcoin, are not considered legal tender in India. However, neither an outright ban, nor any clear regulations have been adopted to this day. As the work on a comprehensive legal framework continues, after failed promises that new regulations would be unveiled soon, a few officials have found that it is becoming impossible to effectively regulate cryptocurrencies.
Despite of government regulations absence, the matters are taken in hands by the Indian banks. Commercial banks have been tightening the clamp on crypto trading, without any mandate by RBI.
The big institutions of India such as HDFC, Citibank, ICICI, SBI, kotak Mahindra have already suspended the Bitcoin’s trading account. They as well have been taking some measures for restricting the transactions related to Cryptocurrency by ordinary people.
According to the reports hostile attitude and regulatory uncertainty have lead to a significant failure in transactions on local platforms of bitcoin trading.
Banks Accused of Disruptive Behavior
The actions of Indian banks mirror similar moves by some of. Last month the world’s biggest banks, like JP Morgan Chase, Bank of America and Citigroup banned crypto purchases with their credit cards, justifying the measure with concerns about defaults due to dropping crypto values.
Indian crypto industry’s representatives have accused local banks of “unilateral decisions”, “irresponsible overreach” and “disruptive stance”. Ajeet Khurana who is heading the Blockchain and Cryptocurrency Committee of India (BACC) said “Without any clear mandate from regulators, asking us to close down our accounts, while refusing to give the reason in writing, is just disruptive to our business.”
Hesham Rehman said “We are struggling to offer withdrawal services since our bank accounts are being shut. This has caused delays of up to one week for no mistake of ours.” He added, “Our average volume has dropped from 300 – 500 bitcoins to 20 – 30 bitcoins now.” The daily trading volumes of top Indian exchanges, like Zebpay and Koinex, have also decreased from 1,000 to 300-500 bitcoins.