In a major fallout of the RBI's April-5 circular, which banned banks from providing financial services to crypto exchanges operating in India, Zebpay, the country's biggest digital exchange for trading in Bitcoin and virtual currencies, on Wednesday said it has disabled the rupee deposit and withdrawal options on its mobile app. The latest announcement comes after the company recently urged its customers to withdraw money, saying that "if Zebpay bank accounts are disrupted (after July-5 deadline), rupee deposits and withdrawals will become impossible."
The current announcement from Zebpay means that neither can users make deposits in rupee on Zebpay nor can they withdraw money in the Indian currency from the crypto wallet. The users, however, can make coin or token deposits and withdraw the same. The company said: "the crypto-rupee and crypto-crypto pair trading service is also functional".
"Today we are disabling the rupee deposit and withdrawal options on the Zebpay app. This is being done in light of the bank account closures as per the RBI guideline," the company said in a statement.
Talking about the RBI freeze, company co-founder Sandeep Goenka on Wednesday tweeted that this is just a "speed bump and that we (crypto companies) shall prevail". He said on Tuesday that he will move the Supreme Court on July 5 to get a stay on the RBI circular till the next hearing on July 20.
Today we are disabling the rupee deposit and withdrawal options on the Zebpay app. This is being done in light of the bank account closures as per the RBI guideline.July 4, 2018
Earlier, Zebpay had also said that if the Zebpay bank accounts are disrupted, rupee deposits and withdrawals will become impossible, which can cause the discontinuation of crypto trade based on rupees, or at least cause significant price movements.
On Tuesday, the Supreme Court of India also refused to stay the RBI circular issued on April 5. Citing the concerns over consumer protection, market integrity and money laundering, the Reserve Bank of India had said: "The entities regulated by the RBI shall not deal with or provide services to any individual or business entities dealing with or settling VCs (virtual currencies)".
Meanwhile, as the RBI deadline for bank ends on July 5, many crypto exchanges are trying to find out alternative ways to keep the business going. For example, cryptoexchanges like WazirX and Koinex Loop have announced that they are working on 'peer-to-peer model' to facilitate virtual currency trade without using normal banking channels. These exchanges are ready to launch 'P2P service', which will be based on escrow -- a contractual arrangement in which a third party keeps the financial instruments on behalf of two primary transacting parties.
The digital currency exchanges have already approached the Supreme Court against the RBI circular, saying that it is against the interest of citizens. The next hearing in the case is scheduled for July 20.