Indian authorities have treated cryptocurrency in a rather mercurial fashion over the past couple of years. In April of this year, for example, the Reserve Bank of India (RBI) – the country’s central bank – announced that firms had 3 months to cease any cryptocurrency exchange activities.
A month after that ban went live, in August, reports were circulating that the central bank had launched its own cryptocurrency research unit. Funnily, that unit was launched in July – the same month the ban on exchanges went into effect.
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Zebpay – sucked into a web of regulation
For some time, cryptocurrency exchanges have been able to survive – albeit in a weakened form – due to a loophole in the cryptocurrency exchange ban. Regulators stipulated that cryptocurrency to fiat exchanges were prohibited but left out cryptocurrency to cryptocurrency exchanges.
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As a result, exchanges such as Zebpay were able to continue operating. It seems problems, however, have been mounting with payments and banks.
Just as many Chinese foreign exchange brokers have struggled with payment-service-providers, it appears Indian regulation has made it difficult for exchanges such as Zebpay to get access to payment services and bank accounts.
“The recent past has been extremely difficult.” Said the company’s statement, “the curb on bank accounts has crippled our, and our customer’s, ability to transact business meaningfully.”
Despite no longer offering cryptocurrency, Zebpay will not be shutting down just yet. According to the company’s statement, it will continue to allow its users to access their cryptocurrency wallets.
The fate of India’s cryptocurrency exchanges will be determined by an ongoing court battle between them and the RBI. Final arguments from the petitioning exchanges were expected to be heard on September 11th but, as of yet, there has been no final decision.