RBI Bans the Fiat Support for Indian Cryptocurrency Exchanges

Reserve Bank of India (RBI) has banned fiat currencies support via banks for all the Indian cryptocurrency exchanges with instant notice. After the series of news on the “RBI’s crypto banking ban rule”; Cryptocurrency exchanges in India are in a dilemma to shut down their fiat currency support.

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What RBI Ban Has To Say?

On Tuesday, July 3, the Supreme Court of India heard the petition against the crypto banking ban by the Reserve Bank of India.

However, it has not yet granted a stay on the ban. Instead, this petition, which was filed by the Internet and Mobile Association of India (IAMAI), will be heard on July 20, along with the other four petitions.

Back on April 6, RBI issued a circular on prohibiting all financial institutions under its control from providing services to cryptocurrency exchanges, initiating on July 5. Without the stay by the Supreme Court, banks are likely to stop their services as per RBI’s order.

As per the notice issued, the exchanges alerted its customers that rupee deposits and withdrawals might be not possible if its bank accounts are disturbed.

Counting Down the Responses of Crypto Exchanges!

India’s great crypto exchanges have shared their words after the ban on fiat currency support:

Zebpay has previously informed its customers that fiat deposits and withdrawals are likely to cease following the ban. It also advises its customers to make the necessary withdrawals beforehand.

The exchange announced on Wednesday that:

“Today we are disabling the rupee deposit and withdrawal options on the Zebpay app. This is being done in light of the bank account closures as per the RBI guideline…INR deposits and withdrawals have been paused in the Zebpay app until banks allow us again.”

Unocoin mentioned a statement after the hearing on Tuesday reiterating that the court “has refused to hear the plea for interim relief” and that “The [next] hearing is set for the 20th of July,”.

The exchange explained:

Banking services are expected to be revoking this week…if you are withdrawing or depositing any rupees in Unocoin, there could be a time when we may not honor such requests.

Coinome ceased INR deposits on July 3 at 11:59 PM. However INR withdrawals will be dropped on July 4 at 11:59 PM.

The exchange suggested its customers and requested them “not to Panic Sell. Therefore, your crypto assets will continue to retain value as per global markets.”

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Banking Auxiliary and Extension

Pocketbits declared that its “INR deposits might not be available after 5th of July, but INR withdrawals will be available even after that. However, users can withdraw their INR anytime. Crypto Withdrawals and Deposits are always available without any restrictions.”

The exchange clarified:

Our current banks have given us an extension to disburse all the funds, this does not mean we will have functioning bank accounts indefinitely. We will notify our users days in advance before the withdrawals are completely stopped.

Meanwhile, Wazirx also declared that its P2P will help you cash in/out of crypto even after RBI ban.

The exchange has recently announced the launch of its P2P trading service which will be live once banks stop providing their services to the exchange.

Exchanges’ Attempt to Educate RBI

Wazirx’s founder and CEO- Nischal Shetty said:

The IAMAI had [also] submitted a representation to the RBI which was a detailed document explaining blockchain, cryptos and how they function. The RBI has said it will respond to that within 7 days….The representation was made with the belief that if the RBI gets a deep understanding of blockchain. And crypto then they may go easy on the ban and think about regulations.

What do you think will come after the RBI’s action and how will crypto exchanges come out of it? Let us know in the comments section below.

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Qadir AK

Qadir Ak is the founder of Coinpedia. He has over a decade of experience writing about technology and has been covering the blockchain and cryptocurrency space since 2010. He has also interviewed a few prominent experts within the cryptocurrency space.

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