As the date for India’s banking ban on the cryptocurrency sector approaches, Zebpay – one of India’s biggest exchanges – is proactively warning users that their fiat deposits could be affected.
Bitcoin wallet and exchange platform Zebpay, one of India’s largest crypto firms, has warned its customers that their fiat rupee withdrawals could stop altogether in the near future, a consequence of the Reserve Bank of India’s (RBI) recent ban.
On April 5th, the central bank published a circular mandating regulated financial institutions including domestic banks to prohibit services to cryptocurrency businesses like exchanges. The central bank mandated a three-month deadline and it’s plausible that cryptocurrency exchanges could see their bank accounts shuttered by July 5.
In such an event, customers will no longer be able to withdraw their deposited rupees, India’s fiat currency, from cryptocurrency exchanges.
In an announcement on Saturday (first published on Thursday), Zebpay stated:
*******In light of that [RBI circular], please note that if Zebpay bank accounts are disrupted, rupee deposits and withdrawals will become impossible. This can cause discontinuation of crypto trade based on rupees, or at least cause significant price movements.
Pointedly, the exchange stressed that customers will only be able to resume withdrawing their fiat deposits if “Zebpay has banking services that permit such withdrawal” after the July 5th deadline has passed.
In a related-FAQ, the exchange said its ‘present intention is to allow crypto-INR pairs” after their bank accounts are shut in order to allow users buy crypto with their frozen fiat deposits. However, Zebpay warned it “cannot guarantee that we will continue the crypto-INR trade pairs forever”, stating it’s unable to currently “fathom all the consequences” of the looming banking blackout.
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.
Earlier this month, the central bank revealed it had conducted no research nor consulted any opinions from experts or the government prior to enforcing the arbitrary banking ban on the cryptocurrency sector.