Cryptocurrencies see robust interest, but many banks yet to start processing transactions

Less than a fortnight after the Supreme Court lifted the ban on trading in cryptocurrencies, players in the sector are seeing a sharp rise in the number of users. These companies are gearing up with expansion plans although many banks are yet to allow transactions.

“After the verdict, we allowed rupee deposits within 24 hours. More than 1,000 customers register on our platform every day. We are seeing transactions growing,” said Sathvik Vishwanath, CEO and co-founder of cryptoasssets and blockchain company Unocoin.

Speaking to BusinessLine , Vishwanath said the company is focussing on growing its customer base and transaction volumes. “We are also coming up with a lending feature where people can use their bitcoin as collateral and get money to their bank accounts. This will allow long-term investors to get some liquidity,” he said.

Nischal Shetty, Founder and CEO, WazirX, also said that the Supreme Court ruling has proved to be a huge relief to the industry and there is a lot of user interest.

“Sign-ups on our platform increased by over 300 per cent on the first day. Our plan is to expand aggressively in the country. We are increasing our team size and also working on new initiatives including investor education and awareness,” he said, adding that the company is planning some new features that will be announced soon.

WazirX, which was acquired by Binance in 2019, has also allowed rupee withdrawals and deposits.

The Supreme Court had on March 4 lifted the near-two-year ban by Reserve Bank of India on trading in cryptocurrencies.

Other cryptoasset companies are also witnessing hectic activity. Bitcoin and cryptocurrency exchange zebpay has also restarted INR deposits and withdrawals.

Blockchain.com recently launched Borrow, a new product offering users, including Indians, to borrow USD-denominated stablecoins against crypto held in their Blockchain.com Wallet. In doing so, it becomes the first major cryptocurrency platform to offer lending directly to everyday consumers, it had said, adding that it had launched an institutional lending desk in August 2019.

CoinDCX, a cryptocurrency trading platform has also recently launched its crypto-referral initiative in India. It will provide an incentive for crypto adoption by rewarding ₹500 for every new referral in addition to ₹500 worth of bitcoin for every new user.

Both Vishwanath and Shetty said there is still not enough clarity amongst banks and many are yet to allow transactions for cryptocurrencies through their gateways.

Mohammed Danish Advocate, Co-founder, Crypto Kanoon, has filed a representation with the Finance Ministry and RBI that some banks including HDFC Bank and IndusInd Bank are declining to provide services or process transactions, for sale and purchase of cryptoassets, on the grounds that they are awaiting fresh RBI directions. The representation asks the RBI to issue an official communication to the banks on the issue.

“Some banks are saying that they are awaiting fresh RBI direction based on the Supreme Court order, while many banks have started providing services to individuals and entities dealing in cryptoassets. Neither is the RBI legally obligated to issue such fresh direction nor does the Supreme Court order contain anything which directs the RBI to issue fresh direction to the banks. So there should not be any scope for confusion for the banks. Often the denial of service is communicated verbally,” Danish said, adding that they have sought RBI intervention as many people are finding it difficult to transact.