India’s SBI Bank stops payments to crypto exchanges

Karthik Subramanian

The State Bank of India, the largest public bank in India, has stopped the payments made by its clients to crypto exchanges in yet another crackdown by the banks in India on crypto.

Though the official stance of the Reserve Bank of India continues to be a wait-and-watch policy as far as cryptocurrencies are concerned with a law being expected on this issue within the next few months, the banks themselves have been slowly and steadily throttling the sector over the last few months. Though no specific reason for the same has been given, it is generally believed that the RBI and the government generally do not have a very favorable view of cryptocurrencies as they believe that it is being used for scams and frauds and it is believed that they are likely to ban them outright when the law gets passed.

All these activities from the banks are believed to be a means to that end though the RBI and the finance ministry seem to be more inclined towards the introduction of a digital currency rather than allowing the spread and usage of a variety of cryptocurrencies. SBI joins a long list of banks in India that have been avoiding onboarding merchants related to crypto and have also been regularly sending out communication to their customers to avoid payments to crypto exchanges and any kind of dealing related to the cryptocurrencies.

The National Payments Corporation of India (NPCI) continues to allow payments to crypto merchants though and it is this ambiguous and contradictory stand taken by different banks with regards to this issue that seems to be confusing the crypto users in India leading to a lot of frustration. In fact, regulators and central banks around the world continue to seem to be confused about how to deal with the crypto industry.

While some countries have fully embraced them, there are others who have chosen the diametrically opposite path and have gone ahead and banned cryptos outright. But countries like India, the US, and others continue to be not sure on how to deal with the ecosystem and seem to be reluctant to go either way at this point of time, which has kept the crypto industry and users on tenterhooks in these countries.

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