Crypto gains currency again as banks ease curbs on purchases

Indian banks are again allowing purchase of Bitcoin and other cryptocurrencies through their channels, easing curbs that they had imposed on such services.

The change in stance happened after the Reserve Bank of India told banks that they no longer can use the regulator’s 2018 circular prohibiting dealings in virtual currencies, as the direction has been struck down by the Supreme Court, said people in the know.

Banks have also reopened accounts with crypto exchanges after conducting due-diligence, in absence of any specific regulation. This comes at a time when Indians are flocking back to cryptocurrencies.

A quick check of a few cryptocurrency platforms shows that lenders such as HDFC Bank, ICICI Bank and Axis Bank are allowing transactions in these virtual currencies through the UPI platform. These banks didn’t respond till press time Tuesday to emails seeking comment.


Widely used crypto exchange WazirX has listed the net banking facilities of Punjab National Bank, Union Bank of India, IDBI, IDFC First Bank, Federal Bank and Deutsche Bank to make payments for crypto purchases.

According to crypto exchanges, more banks are now warming up to them and several channels are available for customers to buy crypto assets.

“It is abundantly clear that now banks are more open to providing services to crypto exchanges. As India moves towards a more transparent regulatory framework for crypto assets, we will see more banks joining the party,” said Shivam Thakral, chief executive of BuyUcoin, a cryptocurrency exchange. BuyUcoin is dealing with Central Bank of India, Lakshmi Vilas Bank and Yes Bank, he said.

“We offer multiple payment modes for Indian investors, such as UPI, Paytm UPI, IMPS, NEFT and RTGS. We also allow users to buy/sell cryptocurrency using their credit/debit cards but we see most of these transactions getting declined by the credit/debit card providers,” said Jay Hao, CEO of cryptocurrency exchange OKEx.com.

A senior executive at a large bank said his bank had not opened its net banking or debit card channels to buy cryptos, but customers were using UPI channels which were outside the control of banks.

“Banks have no control on UPI channels which could be used to make different sorts of payments, though we are yet to resume the full suite of payment services to buy cryptocurrencies,” said the executive.

“We were not allowing any transaction up until recently, and that is still our official stance. But it’s difficult to monitor so many transactions and some do get through,” another banker said.

Still, this is in contrast with the scenario a few months ago when users could only use the MobiKwik wallet or a crypto exchange's peer-to-peer platform to buy cryptos.

Meanwhile, some crypto platforms have started introducing new ways to attract customers.