As Finance Minister Nirmala Sitharaman signals ‘No ban’ but ‘regulation’ on Cryptocurrencies (Read Cryptoassets) in India, banks have started showing interest in the crypto exchanges to tap the growing community of crypto users. One should note that some unverified sources have claimed that Government is looking forward to regulating the crypto market in India through crypto exchanges.
An Economic Times story suggests WazirX has opened its account with the private lender Kotak Mahindra Bank. With this development, Kotak Mahindra Bank has become the first major bank to start a business with WazirX, one of the country’s largest crypto exchanges. Sources privy to the matter say that the tie-up is yet to operationalize as KY, paperwork & other testings are in the works.
The coming together of banking giant and crypto exchange will go a long way in building confidence among investors as this will facilitate financial transactions via bank account. Crypto users will be able to pay & receive money via their bank account and will thus offset the apprehensions of money ‘getting lost’ in transactions via crypto exchanges. Tie-up will enable money transfer via bank account.
The bank-exchange tie-up comes after a gap of almost one year. Earlier, WazirX had tied up with ICICI bank but after feelers from Reserve Bank hinted at the impending ban on digital currency, its businesses were shifted to MobiKwik, a digital wallet and payment services company.
Not just ICICI Bank, but other banking giants including HDFC, SBI & Axis Bank also restricted payments involving crypto platforms and vendors. The banks also deactivated net banking gateway for merchants, thus preventing them from buying or selling digital currencies using its platform.
While the highly looked forward to Cryptocurrency Bill by the Government is yet to be out, investors and crypto exchanges are of the view that the latter could be regulated, instead of an earlier notion of getting banned.
Reports suggest that Kotak is also in talks with other crypto exchanges like Zebay to open their accounts with the bank.