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Amid Bitcoin chaos, Paytm Payments Bank aborts cryptocurrency exchanges

Amid Bitcoin chaos, Paytm Payments Bank aborts cryptocurrency exchanges

Paytm Payments Bank Ltd (PPBL) has neither given the cryptocurrency exchanges any reason for this formally nor told them whether this was because of any regulator issue

Several banks had earlier this week ended their association with cryptocurrency exchanges after the RBI unofficially told them to revisit ties with them Several banks had earlier this week ended their association with cryptocurrency exchanges after the RBI unofficially told them to revisit ties with them

Paytm Payments Bank Ltd (PPBL) will not permit people to purchase and sell crypto assets via its platform from Friday (May 21) evening, when it will cease to deal with cryptocurrency exchanges.

PPBL's competitor PayPal and other payment processors that authorise buying cryptocurrency on their platforms are also likely to pull the plug.

Several banks had earlier this week ended their association with cryptocurrency exchanges such as Zebpay, WazirX, BuyUCoin, after the RBI unofficially told them to revisit ties with them.

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"Paytm Payments Bank is ending their support tomorrow EOD (end of day)," CEO of a cryptocurrency exchange told the Economic Times on Thursday, May 20.

PPBL has neither given the cryptocurrency exchanges any reason for this formally nor told them whether this was because of any regulator issue, he added.

Several leading cryptocurrency exchanges told the publication that many payment processing companies have conveyed their intent to withdraw support.

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Sources stated that the RBI has instructed payment processors to discontinue dealing with cryptocurrency exchanges. As in the case with the banks, the apex bank has not issued any written order to the payment gateway companies. Paytm's decision to pull the plug on cryptocurrency exchanges comes after digital currencies, particularly Bitcoin witnessed a lot of fluctuations.

Bitcoin had plunged to a three-month low on May 17 on conjectures that Tesla may offload its holdings of the virtual currency. The drop was also due to China proscribing any cryptocurrency trading in the country. All this had reportedly caused a lot of chaos at the Indian exchanges.

Over the last few weeks, crypto exchanges had established specialised wallets, onboarding payment processing entities, and using banks outside India. Some of them even created 'offline' systems to enable investors access to crypto assets. However, crypto exchanges will now be left with limited options to accept investments from Indian investors.

Also Read: Cryptocurrency market crashes! Is it time to sell Bitcoin?