Indian Cryptocurrency Exchanges Turn to Peer-to-Peer Transactions to Avoid Payment Channel Restrictions

There are no transfers from payment systems or banks to exchanges in this manner.

Blocking Cryptocurrency Payments in India

According to local media news on April 18, the move was made in response to recent restrictions imposed on payment networks in India. According to an unidentified executive of one of the exchanges, the outlet.

"This is not the way exchanges should operate. It is certainly less efficient. But it clearly doesn't violate any regulations or laws. It's a simple money transfer from A to B,"

Third-party payment processors are usually the entry and exit and exchange of legal tender between customers. On the other hand, the Reserve Bank of India has issued many warnings to them regarding payments to cryptocurrency exchanges.

Coinbase was forced to suspend its payment partners only a few days after opening in India due to pressure from the central bank. The exchange was going to launch the popular Unified Payments Interface (UPI) service, but the state financial regulator halted the proposal on the grounds that they were not aware of any exchange using UPI.

Last week, Indian exchange CoinSwitch Kuber also banned cryptocurrency access through its payment network.

As banks tighten their grip on digital assets, this leaves Indians with fewer options for exchanging legal payments.