Mumbai, INDIA – The Reserve Bank of India (RBI) may have had its day in court, but that hasn’t stopped enterprising cryptocurrency companies from finding alternatives to circumvent the central banks ban on financial institutions providing financial services to crypto-related companies. Two days ago, the Supreme Court of India, ruled in favor of the RBI and upheld its ban on financial institutions providing financial services, including banking and account services, to crypto-related companies. The case before the Supreme Court was brought as a public interest lawsuit, to determine the constitutionality of the RBI’s ban. But with the next court hearing set for July 20 and the ban already in effect, Zebpay, the largest cryptocurrency exchange in India by trading volume, said in a Tweet on Wednesday it had paused the Indian rupee deposit and withdrawal services until banks allow it again following the Supreme Court’s decision earlier this week.
However, Zebpay said that fiat-to-crypto and crypto-to-crypto trading services are still available and according to data from CoinMarketCap, Zebpay has still seen over US$5 million in trading volume in the past 24 hours. Ajeet Khurana, CEO of Zebpay, commented in,
Am very sad! But we will continue our relentless efforts to get things sorted. I am sure crypto is good for India. If we, as a nation, do not make up our mind, we will be caught on the wrong side of history and miss the crypto bus. And that will be a tragedy. https://t.co/f9fG1D5D5U
— Ajeet Khurana (@AjeetK) July 4, 2018
In a similar move, several exchanges in India with relatively smaller volumes such as Coinome and Pexo also announced that they would suspend fiat currency deposit and withdrawal services for now.
Update from Coinome:
1. INR Deposits to stop effective 3rd July 2018 11:59:59 PM.
2. INR Withdrawals to stop effective 4th July 2018 11:59:59 PM.
Requesting all Coinome Customers not to Panic Sell. Your crypto assets will continue to retain value as per global markets.
— Coinome (@CoinomeOfficial) July 3, 2018
We are closing the inr deposit and withdrawal request after 6pm today as per the RBI guidelines. Requesting you all to withdraw your funds before the deadline.
— PEXO (@PexoSupport) July 4, 2018
Yet other Indian cryptocurrency exchanges remain defiant in the face of the RBI ban and have stated that they will continue to allow investors to deposit and withdraw fiat currency from their cryptocurrency trading accounts even though the RBI’s ban was meant to be effective on July 5.
BitBNS, a cryptocurrency exchange with a US$1.4 million 24-hour trading volume on CoinMarketCap, confirmed on Twitter on Tuesday that it will continue its Indian rupee deposit and withdrawal services, while another smaller cryptocurrency exchange KoinOK claimed its fiat currency deposit and withdrawal services are running fine in the face of the RBI ban.
Other cryptocurrency exchanges have resorted to over-the-counter or OTC trading to overcome the RBI ban. KoinEX, an exchange with around US$1.5 million 24-hour trading volume is working with WazirX to launch a peer-to-peer trading service called KoinLoop. The service is seen as a way to cut the exchange’s direct ties with banks so that investors can buy or sell cryptocurrencies in a peer-to-peer manner, without the need for a centralized intermediary According to WazirX’s CEO Nischal Shetty,
“If banking is something the exchanges are not allowed to do, then the solution is (to do) something that direct banking doesn’t come in.”
Despite the RBI ban, prior to a determination by the Indian Finance Ministry on the ultimate status and fate of cryptocurrencies, it is for the most part, more or less business as usual in some quarters of India’s crypto market and the resilience is cause to be optimistic.