The National Payments Corporation of India (NPCI) has decided to not ban cryptocurrency transactions, so now, it would be a bank’s choice whether to do it or not. The NPCI has asked the banks to take the help of their legal and compliance departments while making the decision.
NPCI’s decision is considered to be important because currently, a few of the banks in India have restricted cryptocurrency-related payment.
According to a report published by Economic Times, the banks have asked the payment gateway operators to ban all those merchants on their platforms who are involved in crypto trading. Soon after their announcement, many of the customers involved in cryptocurrency trading were not able to transfer funds through net banking and UPI.
The NPCI’s recent decision has been inspired by the Supreme Court’s March 2020, ruling, which revoked the Reserve Bank of India’s April 2018, decision of imposing a ban on banks on cryptocurrency dealings.
It is to be noted that till RBI has not come out with any new directive, therefore, the NPCI has not banned crypto trading through online methods.
While talking about banks’ decision of banning crypto transactions, Ashish Mehta, the co-founder of DigitX, has said, “Banks barring payments for such trades is not within their constitutional rights after the Supreme Court’s ruling.”
The crypto exchanges with a secure environment provide their services to the buyers and sellers on the platform. They are never involved in the direct purchasing or selling of cryptocurrencies.
Mehta has mentioned that if crypto trading does not receive support then it would be harmful to the entire economy. In this case, the traders would either have to search for new banks that allow crypto trading or use the less efficient methods of transferring funds like IMPS, RTGS or NEFT.
The bank’s support is necessary for the crypto traders because without them the traders would not be able to sell the crypto assets. However, there is an option of selling the cryptocurrency into foreign countries using the peer-to-peer solution, but then the seller would receive a lower price and he/she would also have currency conversion fees.