Popular Indian exchange and crypto wallet provider Unocoin, has made a decision to suspend Rupee (INR) deposits and withdrawals. This decision was made in compliance with directives issued by India’s central bank. The exchange and crypto wallet provider immediately notified its customers that Rupee deposits and withdrawals had been temporarily halted until another way of funding was identified and applied. The directives by the Indian central bank concerning Unocoin, however, did not affect crypto assets and deposits as customers are currently able to transact crypto assets through the crypto rupee trading platform as well as its partner Unodax which is a crypto-crypto exchange platform.
It is also possible for users to use their current Rupee balance to purchase or sell major crypto-currencies, Ethereum (ETH) and Bitcoin (BTC). Also, the crypto-crypto and crypto-rupee pairs remain live on Unodax. Unocoin is the latest local crypto firm to be put to the sword by India’s main bank following a crackdown by the central bank on banks getting involved in crypto dealings with crypto firms or individuals. Earlier other major domestic exchanges had come under the central bank’s radar, one of them being Zebpay, who preempted the central bank’s crackdown and took cover by freezing fiat deposits as well as withdrawals. Another crypto exchange WazirX also decided to take protective measures by transforming into a peer to peer platform so as to not risk crypto-fiat conversions.
The ruthless action by the central bank of India which was to slap a blanket ban on traditional banks from dealing with crypto drew a lot of ire. Exchanges in the country responded by filing legal petitions which reached the floor of the country’s Supreme Court. The challengers argued that the central bank’s blanket ban was unconstitutional and therefore illegal. The Supreme Court upheld the status quo and backed the central bank of India’s directive in the interim but highlighted that a more conclusive verdict would be handed out much later. The judicial highest court denied reprieve to the aggrieved exchanges and it remains to be seen if any concessions will be made when the conclusive judgment is heard at the India Supreme Court.
Exchanges are now left to grapple with the prevailing circumstances and find workarounds In order to remain operational. One such exchange that has explored possible is Unocoin, one of the country’s crypto wallet providers and exchange. Unocoin is therefore wise in exploring the idea of only supporting crypto to crypto trades since it looks like peer to peer arrangements do not attract negative attention from financial regulators such as the country’s central bank. With the air around crypto-currency being harsh in India, the country’s finance ministry has reportedly constituted a committee that will look at the regulatory framework concerning virtual currencies.