Nobody can deny that UPI (Unified Payments Interface) has been a huge success in India. Paytm, Google Pay, and PhonePe, for example, are now accepted practically everywhere else, including retailers, e-commerce platforms, and brick-and-mortar stores. Today, almost everyone with a smartphone uses one of these apps to make payments.

The National Payments Corporation of India (NPCI) is the organisation in charge of India’s huge payment and settlement system. The UPI Infrastructure, which allows for free instant realtime payments across India, is supported by all major Indian banks. Merchants adore UPI since it has no MDR. Because of UPI, anything from setting up regular transactions to paying for a “chai” is now possible in India via digital payments.

NPCI Data shows the adoption of UPI has skyrocketed ever since launch in 2016.

Companies that deal in cryptocurrencies haven’t had much luck with Indian payment systems thus far. Banks are hesitant to deal with Indian cryptocurrency exchanges, resulting in exorbitant service fees for users. Platforms like Mobikwik used to provide deposit services to Indian crypto exchanges, however they stopped doing so on April 1, 2022. Due to the lack of UPI and a dependable payment processing partner, volumes on India’s four major cryptocurrency exchanges have plummeted.

Data from CoinGecko shows that daily trading volumes on Indian crypto exchanges, which serve roughly 15 million individuals, have fallen by 88 percent to 96 percent since peaking last year. According to the data, WazirX, India’s largest crypto exchange, saw volumes collapse 93% from a high in October. Most of these new age Crypto start-ups are registering their businesses outside India due to lack of regulatory framework. Talent, Capital & Investment opportunities are being lost because of this.

Why Banks are hesitating?

We need to go back in time to understand why banks are hesitant to provide banking services to these Crypto Exchanges in India. In 2018, the Reserve Bank of India issued a circular instructing all banks to cease providing services to platforms trading in cryptocurrency.

To summarise the RBI’s banking prohibition, the Central Bank of India issued a simple blanket ban on the industry. Fortunately, the Supreme Court of India intervened in 2020 to overturn the RBI’s unlawful ban on Cryptocurrency Exchanges.

Cryptocurrency use has exploded in India since the RBI banking prohibition was lifted. Before 2020, I don’t recall many people knowing what Bitcoin was, but today, practically every young tech-savvy Indian knows what it is. As per a ChainAnalysis report in 2021, India ranked 2nd Globally in terms of adoption of Cryptocurrency.

Why NPCI is hesitant

According to my assumption, Banks who embrace cryptocurrency are sabotaging themselves because, regardless of what we all say, Bitcoin was designed to replace the linkage between sovereign and money. RBI isn’t that pro-crypto either. All the recent statements made by them so far has been to ban private cryptocurrencies altogether and launch a Centralised version of Paper Money called as CBDC.

Following the Supreme Court’s decision to overturn the RBI’s banking ban, banks can no longer openly refuse to provide services to cryptocurrency exchanges. They’re all taking a low-key approach, telling payment processors to stop working with all cryptocurrency exchanges. In the interim, things became so bad that banks began blocking retail customer accounts that were trading cryptocurrencies last year, citing the same 2018 RBI Circular as a reason.

NPCI released an official statement last week on the same. Coinbase which just started their operations in India, stopped accepting UPI deposits after this.

As a result, in India, cryptocurrency exchanges are not permitted to offer a zero-fee payment option. The fact that gambling apps have rapid free UPI deposit access is a questionable aspect of all of this. Despite having to pay 30% Tax on gains, Crypto Industry isn’t allowed to have this facility so far by the banks.

Way around no UPI?

Crypto exchanges have devised several ingenious methods for circumventing banking restrictions. Peer to Peer is one of the most popular among them. For clients ready to deposit funds in their accounts, exchanges such as WazirX and Binance offer some of the greatest peer to peer alternatives.

You might be wondering what a peer to peer transaction is. For those unfamiliar, peer to peer relies on other users of the network ready to buy or sell assets at the same time, as opposed to traditional payment gateways where you pay straight to the merchant bank account.

Instead of paying the merchant, buyers pay directly to the bank account of the sellers. Throughout the procedure, funds are escrowed, and the buyer receives the locked assets once the seller approves the money in the bank. It isn’t as fast as a payment gateway based deposit but absolutely does the job for most people.

In the meantime, exchanges are already partnering with banking providers and small finance banks to enable deposits for the users. Coinbase has also invested into startups dealing with payment processing in India. As a matter of fact, after the Crypto bill is introduced, these problems can be expected to fade off.

Thanks to Ethereum Push Notification Service

You may have already noticed that we don’t serve any ads on our website. That’s because of awesome projects like EPNS which help us sustain the website. If you don’t know about them already, it’s a decentralized Web 3.0 based notification platform. Unlike Android or iOS notifications, EPNS uses a decentralized approach to send alerts about your activities on DEXs and platforms like CoinDesk, MakerDAO, BTC Tracker, and more.

Credits: EPNS App

How to get started?

  • Firstly, you’ll need to have a wallet like Metamask, WalletConnect, etc.
  • You can then download the EPNS application from Play Store or App Store and sign up using the Wallet ID.
  • If you’re like me, a Browser Extension must look like your favorite option.
  • Go to the available notification channels.
  • Click on “Opt-In” & Sign the popup. It’s free and doesn’t take any gas.
  • That’s it.

The best part, EPNS is already working on a Wallet to Wallet messaging service. If you haven’t checked them already go now!


Educating people about Blockchain over Zoom and offline events. Writing blogs related to crypto and making videos explaining it.