Zebpay, a popular Indian cryptocurrency exchange, divulged that support for rupee withdrawals may cease, due to a directive issued by the Reserve Bank of India that prohibits banks from facilitating crypto business.
RBI Directive Challenged by Indian Crypto Industry
In its latest announcement, Zebpay stated that the Indian crypto market has challenged the circular via the Indian Supreme Court, which is the country’s highest judiciary body. Zebpay and others in the industry find the circular dictatorial and stifling to the crypto ecosystem in the country.
However, recently the Supreme Court said it would not put a stay on the RBI directive. Given the present scenario, the cessation of rupee withdrawals from crypto exchanges appears be imminent. Investors must consider this risk before choosing to hold Indian currency in their exchange accounts.
The decision of the RBI directly hampers the growth of the crypto sector in the country. Lately, the Indian government also imposed a Goods and Services Tax on digital currency trading and mining. The Indian government’s overall position on crypto appears to favor crippling the budding crypto trading market in the country.
Zebpay Encourages Customers to Cash out INR Holdings
Zebpay has promised to facilitate customer requests for the withdrawal of rupee balances to the best of their ability, noting that traders will only be able to withdraw in INR if the banking sector approves such transactions. In case a customer chooses to withdraw money in Indian currency, all the unexecuted trading orders must be canceled before putting up the withdrawal request.
In light of the upcoming deadline outlined in the directive, Zebpay urges customers who wish to make withdrawals in INR to do so as soon as possible. The Zebpay website greets users with a cautionary statement:
“As per a recent RBI action, banks have been told to discontinue banking services to those dealing with virtual currencies. While our industry is challenging this legally, the outcome is beyond our control. Hence, if you are holding any rupees, or depositing any rupees in Zebpay, there could soon come a time when we may not be able to honor withdrawal requests. Please continue only if you understand this risk.”
In addition to notifying customers of the directive and its consequences, Zebpay stated that they can not be liable for any losses that occur as a result of the directive. The company the following in their announcement:
“Also, in case of disruption of banking services to Zebpay, you hereby indemnify Zebpay, and agree to hold Zebpay free and harmless at all times, against all claims, proceedings, expenses, costs, actions in the event of any prejudice and/or loss being caused to you by any act or omission by Zebpay or any other party, in regard to your rupee balance, transactions, trading, deposit, or withdrawal.”
Crypto-to-crypto Trading on Zebpay Unaffected by Directive
Although fiat withdrawal will soon end on Zebpay, the exchange will continue to operate. New accounts will be allowed, and crypto-to-crypto trading will continue on the exchange. The company also stated, “…our present intention is to allow crypto-INR pairs to trade even after our bank accounts shut,” though they acknowledge that there are too many uncertainties for them to guarantee such trading.
Is the RBI indirectly trying to kill the Indian crypto enthusiasm? Let us know your views in the comments section.