India ban brings crypto exchanges to grinding halt

As a response to the ban, Indian crypto exchanges such as Zebpay are deactivating from their platforms all deposits and withdrawals options in rupees.

“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,” tweeted Zebpay.

A few other exchanges have decided to turn to the peer-to-peer (P2P) trading scheme, which connects them to fellow traders, with whom Bitcoin can be bought and sold. However, P2P trading will only allow investors to trade Bitcoin for another cryptocurrency and not fiat.

As per the RBI ban, exchanges and cryptocurrency firms will not have access to bank loans or corporate accounts. One argument used by the RBI to justify the ban is that Indian law clearly stipulates currency must be made of metal.

And although the Supreme Court has so far refused to stay the RBI’s decision, it will hold another hearing on the matter on 20th July. The court has asked the central bank to consider arguments made by crypto exchanges, such as cryptocurrencies having been adopted by other countries and that concerns over the crypto space can be dealt with regulatory framework.