CoinSwitch Kuber suspends crypto purchase and money transfer on app
What's the story
Amid the regulatory uncertainties surrounding cryptocurrencies in India, CoinSwitch Kuber has temporarily disabled all modes of payments to purchase digital coins. Since earlier today, users have not been able to make INR deposits on the app via all modes of payment, including UPI and bank transfers. This comes in the background of the 30% taxation on crypto transactions that became effective on April 1.
Context
Why does this story matter?
Crypto exchanges have been in the eye of the storm since April 1. The issue is magnified by the government's reluctance to say anything explicitly regarding the legality of cryptocurrencies in India. The uncertainty has led to many partners deserting these exchanges. For instance, MobiKwik, which was the only wallet across multiple platforms, withdrew its service from the beginning of this month.
The issue
CoinSwitch has suspended bank transfers as well
CoinSwitch is one of the biggest crypto trading platforms in India. Payments in the app were earlier done via bank transfers, but the company enabled the UPI option just a day ago. The sudden suspension of all modes of payment, including bank transfers, has effectively left no option to load the app's wallet to buy cryptocurrencies. CoinSwitch had over 14 million users in 2021.
Taxation
Taxation on crypto transactions have affected the exchanges adversely
While introducing the 2022-2023 budget, Finance Minister Nirmala Sitharaman announced that the government intends to levy a 30% tax on gains from transactions. This came to effect on April 1. Since then, transaction volumes and domain traffic have plunged in India's major cryptocurrency exchanges. Along with the 30% tax, an additional 1% TDS on crypto transactions will come into effect on July 1.
Similar issues
NPCI has locked horns with crypto exchanges in the past
US-based Crypto trading giant Coinbase recently launched its services in India with the announcement that customers will be able to use UPI for purchases. On the same day, NPCI, which operates UPI, said that it is not aware of any such development. Soon after, the company disabled the option, which left the app with no mode of payment.