Despite the circular banning RBI-regulated entities from dealing in crytocurrency-related transactions coming into effect from Wednesday, cryptocurrencies will continue to be functional. The Supreme Court had earlier refused to provide an interim stay on the RBI circular.
“Crypto to crypto payments will still be functional. Peer-to-peer transactions will also continue to be valid on exchanges and will continue to function, as these transactions do not fall under the jurisdiction of the RBI. Other than these, there may be some international banks or wallets like Paytm and Mobikwik that could be integrated into exchanges. This could also direct a large amount of business towards such payment wallets,” said Sandeep Phogat, CEO and founder, Panaesha Capital.
Crypto-exchanges like Paxful and Cryptex24 support the purchase of cryptocurrencies using Flexpin Vouchers, pre-paid cards, Perfect Money, Neosurf and Western Union or MoneyGram (or equivalent). The cash for the cryptocurrency payments can be transferred to the specific recipient. Parties who want to trade in cryptocurrencies can also conduct peer-to-peer transactions. According to Phogat, data collected from Indian crypto-exchanges indicates a higher number of crypto-to-crypto transfers.
Post the circular, some of the cryptocurency exchanges, including Zebpay, had told the customers that it has discontinued rupee withdrawals.
“Please note that you will not be able to withdraw rupees unless Zebpay has banking services that permit such withdrawal,” Zebpay said in a communique.
There was a 5-10 per cent drop in trading in the market after the verdict was released by the Supreme Court, said Phogat. However, there is still another hearing that is set for July 20.
Meanwhile, economic affairs secretary Subhash Chandra Garg has said the government is working on a framework for crypto investments and hopes to be done with it in by the first fortnight of July.