A sigh of relief for crypto investors! NPCI scraps crypto ban idea, leaves it to banks

New Delhi: Crypto investors can breathe a sigh of relief, as the National Payments Corporation of India (NPCI) has clearly refused to block crypto trades in the country. The umbrella body for digital retail payments in India has left the decision of banning crypto trade on banks’ risk and compliance team.

NPCI’s decision has come at a time when a few banks in India have decided to pull the plug on crypto trading platforms, fearing that the government could announce a complete ban on buying/selling of digital coins. It is important to note that banks have started taking down on some cryptocurrency exchanges and investments in India.  

According to a report by Economic Times, NPCI has refused to take a central decision to disable the use of UPI and RuPay cards as payment modes for crypto investments. The move, if taken, would have been applied uniformly to all banks, leaving investors with a handful of investment options such as MasterCard, Visa, PayPal, etc. 

As many banks are allowing crypto trade, it’s yet not clear how long will trading platforms get the support of formalised banking institutions of the country. Recently, in inter-ministerial discussions, lawmakers reportedly discussed granting investors an exit window of 3-6 months before completely banning the trading, mining and issuing of cryptocurrencies in India with the upcoming Cryptocurrency and Regulation of Official Digital Currency Bill, 2021.

The proposed legislation that is yet to be tabled in the Parliament might only legalise the cryptocurrency currently mooted by the Reserve Bank of India (RBI) while banning all others. Reports suggest that Indian owns digital coins worth over $1.5 billion or Rs 10,000 crore.