CoinSwitch Kuber disables UPI, other modes to buy crypto

Crypto exchange CoinSwitch Kuber has deactivated all modes of payment to buy cryptos in Indian rupees on its platform, thereby leaving users with very limited options to buy cryptos. CoinSwitch Kuber is one of the two crypto-based unicorns in India, along with CoinDCX.

The Bengaluru-headquatered crypto firm has disabled rupee deposits via Unified Payments Interface (UPI) or any other modes, like NEFT, IMPS, RTGS, which means users can't load money in rupees to buy cryptos on the platform.

CoinSwitch is yet to respond to the queries sent by Fortune India in the matter.

The move by one of India's largest cryptos comes two days after U.S.-based NASDAQ-listed crypto exchange Coinbase stopped accepting UPI payments in just three days after the launch of its trading services in Bengaluru.

Coinbase on April 7 had announced that it will allow payments through Unified Payments Interface (UPI) on its platform. The same day, National Payments Corporation of India (NPCI) issued a statement that it’s not aware of any crypto exchange using UPI. On April 10, the company disabled the UPI payment facility.

Following this, its users can now only do online transactions only via Immediate Payment Service (IMPS), to not buy but only sell cryptos. It’s not clear whether it was Coinbase’s decision to stop the UPI payments or it was directed by the NPCI.

Before this, homegrown digital wallet Mobikwik had also stopped support for all crypto trading firms on April 1. The company has also declined to comment on its decision to leave the cryptocurrency space. The app had partnered with several crypto exchanges like WazirX for facilitating sale and purchase of cryptocurrencies.

The crypto industry in India is in a kind of soup after the government in Budget 2022 announced a 30% tax on crypto gains from April 1, 2022. WazirX, ZebPay, CoinSwitch Kuber, and Giottus, all of them have seen trading volumes dropping massively along with domain traffic on their platforms since the crypto tax came into effect on April 1.

Finance minister Nirmala Sitharaman had proposed a new taxation policy for digital currencies in India during Budget 2022 this year. Under this policy, 30% tax was proposed on gains from the sale of digital assets from April 1. On top of that, a 1% TDS (tax deducted at source) will also be charged on all crypto transactions on profit as well as loss. In case of loss, the user could claim a refund on the TDS paid.

The new policy also does now allow set-offs or carry forwards or deductions. This has angered industry stakeholders, and they have also asked the government to revisit these provisions and issue new guidelines by considering suggestions from all the stakeholders of the crypto industry.