SBI prohibits users from using its UPI to trade in cryptocurrencies

State Bank of India (SBI), the country’s largest banking institution, has prohibited crypto exchanges from receiving payments using its UPI network. According to payment industry insiders, the bank has instructed payment processors to disable SBI UPI for crypto businesses.

Also Read| Serious concern on the financial stability of cryptocurrencies: RBI Governor

As a result, traders cannot acquire Bitcoin or any other cryptocurrency by sending funds via UPI, because none of the processors who handle payments for exchanges will be allowed to accept money transferred for cryptocurrency purchases on their State Bank of India accounts.

Also Read| Mark Cuban tells Coinbase CEO to ‘go on the offensive against SEC’

The Unified Payment Interface (UPI), permits all bank account holders to transfer funds from their cellphones without having to input their bank account information or their online banking login Credentials.

Also Read| Venezuela seeks to leverage cheap power to ride cryptocurrency wave

Several banks have imposed restrictions on financial transfers related to cryptocurrency trading in the last six months. One of the few remaining payment options for crypto exchanges has been closed as a result of SBI’s recent move.

Also Read| After El Salvador, now Ukraine passes bill to legalise cryptocurrency

“It is the policy of the bank not to comment upon matters relating to the subject matter,” said an SBI spokesman.

WazirX, the country’s largest crypto exchange, has already been hit by the decision, with the processing agency following SBI’s instruction. Payment processors may cease taking payment for other exchanges until SBI reconsiders, according to industry sources.

Also Read| On balance: Pros and cons of El Salvador’s cryptocurrency approval

WazirX chief executive Nischal Shetty said, “We’re trying to discuss and put forward our points to SBI. WazirX follows KYC (know your customer) norms and AML (anti-money laundering) policies. Being the largest crypto exchange in India, millions of Indians are currently affected due to this move by SBI.”

Also Read| How Bitcoins will be mined in El Salvador through volcanoes

Finance Minister Nirmala Sitharaman previously stated that the government was not planning a harsh crackdown on crypto and that keen investors would be given ample opportunity to experiment with digital currencies.

Also Read| Potential countries eyeing El Salvador-like move on cryptocurrency

Investors in India possess crypto worth Rs 15,000 crore, and more individuals are interested in getting into the area, especially after bitcoin’s price surge in recent years. Approximately 350 Indian firms are active in the crypto and blockchain sector.