Indian cryptocurrency exchanges are still struggling to secure viable, permanent payment solutions for seamless transactions after banks and payment gateways have cut off ties with them, according to six industry insiders.
With the country’s central bank, the Reserve Bank of India (RBI) informally asking banks to stay away from digital assets owing to its impact on financial stability, cryptocurrency exchanges in the country are facing the heat of it, with increased customer complaints of payment inefficiencies.
For instance, Avinash Shekhar, a co-chief executive of ZebPay, one of India’s oldest crypto exchanges, said that the platform is not offering immediate settlement as banks are reluctant to cooperate with them.
Trading platforms in the country have now taken up other methods such as tying up smaller payment gateways, building their own payment processors, holding back on immediate settlements, or offering only peer-to-peer transactions.
In fact, Coinswitch and WazirX have already tied up with smaller payment processing firm Airpay. Moreover, Airpay is backed by venture capital fund Kalaari Capital and billionaire stock investor, Rakesh Jhunjhunwala, a staunch critic of cryptocurrencies.
At the same time, Bitbns crypto exchange has built its own basic payment processor, allowing only the basic transactions as the payment system is not approved by RBI.
At the same time, Indians’ investments in the crypto market have surged to $40 billion from about last year’s $200 million, according to data from blockchain analytics firm Chainalysis cited by Bloomberg this week.
The increased interest in cryptocurrencies is mostly coming from 18 to 35-year-olds, despite outright hostility toward the asset class from the central bank and a proposed trading ban.