coinbase: Coinbase chief Brian Armstrong questions India’s crypto trading ‘shadow ban’

Mumbai: Brian Armstrong, the co-founder and chief executive of Nasdaq-listed cryptocurrency exchange Coinbase, has questioned the informal restrictions on crypto trading by the Reserve Bank of India (RBI) and the National Payments Corporation of India (NPCI), saying they may be violative of a Supreme Court ruling.

The
apex court had, in an order in 2020, set aside a 2018 RBI circular that had prevented banks from letting customers use their accounts to send or receive funds for trading in cryptocurrencies.

“Tough questions, and good questions, for NPCI and RBI in India. Is their “shadow ban” a violation of the Supreme Court ruling?” Armstrong tweeted on Tuesday.

Armstrong was
referring an ET news break, which said leading banks had questioned the shadow ban on crypto trading and asked NPCI to spell out in a formal directive the curbs on the use of the popular Unified Payments Interface (UPI) railroad for buying and selling virtual digital assets (VDAs) including crypto.

Several banks have disabled UPI options for crypto-related payments following “verbal instructions” from NPCI.

The RBI and NPCI were not immediately available for comment on whether their actions violated the top court directive. Coinbase declined to elaborate on Armstrong’s tweet.

Coinbase
launched its exchange services in India earlier this month but had to
shut payments via UPI three days later owing to the informal curbs, ET reported on April 10.

On April 12, crypto trading platform CoinSwitch Kuber also
disabled rupee deposits using UPI.

Last year, several banks including ICICI Bank and Paytm’s Payments Bank cut ties with crypto exchanges based on “informal requests” by the RBI to banks.

Several leading banks clamped down on customers using bank accounts for cryptocurrency transactions. HDFC Bank and State Bank of India sent notices to many customers, warning that their accounts could be permanently shut down.

Since multiple banks were citing RBI’s 2018 circular, which had been set aside by the Supreme Court, the central bank was
forced to clarify in a notice in May 2021 that banks could not use that circular to impose curbs on crypto investors.

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