Zebpay, a popular Indian cryptocurrency exchange, divulged that support for rupee withdrawals may cease, due to a directive issued by the Reserve Bank of India that prohibits banks from facilitating crypto business.
This is due to an ongoing court battle regarding the Reserve Bank of India’s decision to prevent financial institutions from directly working with crypto businesses.
In its latest announcement, Zebpay stated that the Indian crypto market has challenged the circular via the Indian Supreme Court, which is the country’s highest judiciary body. Zebpay and others in the industry find the circular dictatorial and stifling to the crypto ecosystem in the country.
A portion of the open letter reads as follows:
“Please note that you will not be able to withdraw rupees unless Zebpay has banking services that permit such withdrawal.” The letter further reassures existing users, saying— “Of course, since our bank accounts are functional at the time of writing this announcement, you are welcome to place a withdrawal request for your rupee balance. If you do that, we will endeavor to return your rupee balance to your bank account as soon as possible.”
This letter makes it clear that while the withdrawal function is still intact, the exchange is concerned that this could soon change.
However, recently the Supreme Court said it would not put a stay on the RBI directive. Given the present scenario, the cessation of rupee withdrawals from crypto exchanges appears be imminent. Investors must consider this risk before choosing to hold Indian currency in their exchange accounts.
Prices took a sharp plunge amid a spike in trading volumes surrounding the announcement, sinking to a low of ?350,782, approximately $5,150, after trading near ?460,000 ($6,758) within a 24-hour period. At press-time, prices have seemingly stabilized above ?400,000 with bitcoin trading at ?414,000 ($6,081) domestically on Monday afternoon.