As a result of new guidelines set out by the Indian Reserve Bank (RBI), Zebpay has been forced to suspend all trading of India’s local currency, the rupee. They announced the move on Twitter this morning, July 4.
Today we are disabling the rupee deposit and withdrawal options on the Zebpay app. This is being done in light of the bank account closures as per the RBI guideline.
More details here: https://t.co/bptLZXFL7R pic.twitter.com/NEvVNHgJiP
— zebpay (@zebpay) July 4, 2018
In a further disclaimer on their website, they mention that the industry is continuing with a legal challenge to the ruling.
The RBI proposed a ban on cryptocurrency transactions on April 6 this year, citing the various risks associated with dealing in virtual currencies. The ban prohibits all financial institutions in the country from engaging in any cryptocurrency-related activity. This includes individuals as well as banks and businesses.
An appeal to the ruling was launched by the cryptocurrency community which resulted in a lawsuit being filed that highlighted an admittance by the RBI that they had not carried out proper research on the industry. However, despite the strength of the case, the India Supreme Court turned down the appeal.
Following the announcement of the ban institutions were given three months to comply, meaning that on this Friday, July 6, it will come into full effect.
Huge Blow to Local Community
The ruling effectively makes trading of cryptocurrencies to fiat impossible in India and affects a huge number of citizens which rely on the technology. Any cryptocurrency currently held within exchanges will not be available for withdrawal, leaving many people unable to access their funds. Zebpay has noted though that it is still accepting crypto deposits and withdrawals and crypto-to-crypto trading is still possible across its many supported cryptocurrencies.
Hopefully, the ban will motivate citizens and fintech developers in the country to accelerate the adoption of crypto-to-crypto payments solutions that can be facilitated via smartphone. However, until more companies begin using cryptocurrency as a salary payment method, the majority of citizens are still tied to the will of the RBI.
The Internet and Mobile Association of India have filed a petition with the Supreme Court to have the ruling reversed.
In an interview on local television discussing new cryptocurrency regulations, Department of Economic Affairs secretary Subash Chandra Garg stated that the organization is close to developing a template for cryptocurrency regulations,
“We have prepared a draft which we intend to discuss with the committee members in the first week of July.”, he concluded.
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