NPCI Refuses to Ban Cryptocurrencies in India: Leaves the Decision to Banks

The National Payments Corporation of India (NPCI) does not intend to block cryptocurrency trading. Instead, it plans to leave the decision to individual banks and thus they can determine their own risk level.

NPCI to Pass the Decision to Local Banks

The consequences of the COVID-19 pandemic caused colossal damages to the nation and many experts outlined the uncertainty which reigns in it. But despite the current catastrophic situation in the Asian country, trading volumes in cryptocurrencies have exploded over the past year.

However, the country continues to dabble with the idea of implementing a full-scale ban on cryptocurrency operations. The latest to provide some clarity on the matter is the National Payments Corporations of India (NPCI).

Economic Times reported that some bankers requested from the agency to block cryptocurrency transactions on its network. In its turn, the NPCI said it has no plans to ban digital asset operations and advised banking institutions to make their own decision.

Per the report, some local institutions have expelled traders who buy and sell cryptocurrencies. However, only a few of them restricted customers from crypto trading accounts via the united payments (UPI) interface and net banking.

A local industry official shed more light on the issue:

”Customers of banks which have disabled crypto cannot anyway use facilities like UPI, net banking or cards. However, trades continue to happen as many banks are still allowing.”

The Harsh Crypto Environment in India

Operating with digital assets in India is a very complex process that causes a lot of controversies. Back in March 2018, the country’s central bank banned cryptocurrency trading. Two years later, though, the Supreme court of India reversed the decision.

Despite being legally eligible to operate with digital assets, the nation’s authorities kept implementing stringent rules. Reports from earlier this year indicated that locals had to report all of their cryptocurrency activities.

Furthermore, the world’s second-most populated nation intended to take even more severe measures. As CryptoPotato informed, the country planned to criminalize bitcoin and other cryptocurrencies. According to the proposed bill – mining, trading, and custody of digital assets should pass as a punishable offence. Nevertheless, more recent reports said this proposition was overruled.