As the financial institutions in India started to cut their ties with the crypto exchanges, the digital asset trading platforms try their best to secure viable, permanent payment solutions for smooth transactions in the country, said the six industry insiders.
The crypto exchanges in India are struggling real hard to cope with the country’s recent environment regarding cryptocurrency.
As per the report, the Reserve Bank of India (RBI) does not support digital currencies because of its growing concern over their impact on financial stability. A few weeks ago, the Indian central bank held an informal meeting with several banks in the country and asked them to cut their ties with crypto-related businesses.
Avinash Shekhar, the co-chief executive of ZebPay, while sharing his view on the matter said that the Indian banks are afraid to do business with the crypto industry. However, the exchanges are trying their best to convince the financial institutions in the country and merge with them, but the progress is very slow.
Presently, the crypto exchanges have decided to partner with smaller payment gateways in the country to process the transaction. They are also planning to develop a new payment processor which would be owned by the exchanges.
It has been reported that currently, two of the crypto exchanges have partnered with Airpay, a smaller payment gateway, because the larger ones cut their ties.
As per the industry estimate, around 15 million people in India invest in cryptocurrency and the total value of that investment is over $1.34 billion.
While the crypto exchanges are searching for payment processors, a few of them like like WazirX, currently, rely only on peer-to-peer transactions on certain days, and some of them like Vauld allow the customers to process the transaction manually.
The report states that the payment gateways like Razorpay, PayU and BillDesk have also dissociated their ties with exchanges because they also depend on the banks to facilitate the transaction.
CoinSwitch and WazirX are the few of the crypto exchanges that have presently collaborated with Airpay, a Mumbai-based payment processor, to process the transaction instantly.
It is to be noted that the payment gateway in India is supported by the venture capital fund Kalaari Capital and billionaire stock investor, Rakesh Jhujhunwala.
After the major payment gateways pullout their support from the crypto exchanges, it affected the transaction, which flooded the social media with a lot of customer complaints. Apparently, the exchanges have tied up with smaller payment gateways but they have not proved to be very successful in processing high-volume transactions.
Though the smaller gateways are processing the transaction, they still are not getting support from the banks to process high-volume transactions. Therefore, a few of them have started to cut their ties with exchanges.
“Partnership with the smaller payment processors has not emerged as stable yet, and is more of a temporary solution,” said the founder of the Indian crypto exchange.
Othe crypto exchanges like Bitbns have developed their own payment processor which can process some essential transactions, as the system does not require approval from the Reserve Bank of India.
Gaurav Dahake, the chief executive of Bitbns, stated, “These are only stop-gap arrangements and not a solution to the problem the industry is facing.”