According to reports, the State Bank of India (SBI) has blocked payments to cryptocurrency exchanges via its Unified Payments Interface (UPI). Payment processors have been instructed to turn off the bank’s UPI for cryptocurrency merchants.
Payment Processors Have Been Told to Disable SBI UPI for Crypto Firms
The country’s largest bank, State Bank of India, has reportedly “blocked the receipt of funds by crypto bourses on its UPI platform,”, citing payments industry sources.
The National Payments Corporation of India (NPCI) developed the Unified Payments Interface (UPI) to facilitate interbank transactions through mobile phones. The Reserve Bank of India, India’s central bank, regulates and supervises the UPI payment system (RBI). According to the article:
Payment processors have been instructed by the bank to disable SBI UPI for cryptocurrency merchants.
This means that SBI bank customers cannot use UPI to transfer funds to cryptocurrency exchanges to purchase cryptocurrencies such as bitcoin.
According to an SBI spokesperson, “it is the bank’s policy not to comment on matters relating to the subject matter.”
Several Indian banks have restricted fund transfers to cryptocurrency exchanges. The NPCI, on the other hand, stated in May that it will not prohibit UPI payments to crypto companies. Instead, it advised banks to make their own decisions about whether to allow cryptocurrency transactions based on their own risk assessment.
Now that SBI has made its decision, many other banks may be hesitant to accept crypto merchants on their respective UPI platforms, according to the publication.
Wazirx, one of India’s largest cryptocurrency exchanges, has already been impacted. “We’re trying to discuss and put forward our points to SBI,” CEO Nischal Shetty told the publication. Wazirx adheres to KYC (know your customer) and AML (anti-money laundering) standards. As India’s largest cryptocurrency exchange, this move by SBI affects millions of Indians.”