India's biggest lender, SBI bans traders from using its UPI to buy/sell crypto

State Bank of India told payment processors to disable its UPI on cryptocurrency trading platforms.

State Bank of India, India's largest lender, has blocked crypto exchanges from receiving funds via its UPI platform and has asked payment processors to disable SBI UPI on their platforms as well.

SBI's decision comes after a slew of banks imposed similar bans on crypto exchanges over the last few months. HDFC Bank, in May, had warned investors against dealing in virtual currencies, including bitcoin, and said that failure to heed the advisory may lead to the cancellation of their cards and restrictions of transactions.

A media report stated that ICICI Bank informed a few payment gateways to shut off its net banking services for merchants who were buying or selling cryptocurrencies. The Quint, quoting anonymous industry experts, said other large banks were likely to follow suit.

Traders are now using e-wallet services to continue transacting on crypto trading platforms, but paying wallet charges and dealing with limits on fund transfers have been putting people off.

The Reserve Bank of India has been quite vocal about its reservations on virtual currencies. Governor Shaktikanta Das recently said the central bank had conveyed to the government its "serious and major" concerns around crypto and its financial stability.

For crypto investors and enthusiasts, his comments come at an inopportune time with the Union Cabinet just weeks away from taking up a bill to regulate virtual currencies and their fledgling market in India.

Finance Minister Nirmala Sitharaman earlier indicated that the government was not considering clamping down too hard on crypto, and that interested investors would be given adequate opportunities to experiment with digital currencies.

India has nearly 1.5 crore investors who hold crypto worth Rs 15,000 crore — and an increasing number of people are looking to get into the space, especially following the bitcoin price rally over the last year. Nearly 350 Indian startups are operating in the cryptocurrency field, and its related blockchain space.

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Edited by Kanishk Singh


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