Indian cryptocurrency exchanges are struggling to find new payment solutions as domestic banks started cutting ties with them, Reuters has learned, citing industry insiders. The exchanges are facing another round of hostility after the Reserve Bank of India (RBI), India's central bank, found negative impact cryptocurrencies might have on financial stability.
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"Banks are reluctant to do business. We have been talking to several payment partners but the progress has been slow," said Avinash Shekhar, a Co-Chief Executive of ZebPay.
According to the heads of local cryptocurrency exchanges, the trading platforms are studying whether they need building their own payment processors or offering only peer-to-peer transactions. Reuters found out that at least two exchanges have already entered into a partnership with smaller payment processing firm — Airpay.
As iHodl earlier reported, cryptocurrency buyers from India might face new difficulties with purchasing cryptocurrencies from overseas exchanges as the country's tax department is weighting whether it could impose the 2% on these purchases.
The so-called "Google tax" is focused on levying services provided in India by overseas companies. The tax is designed to discourage big e-companies diverting profits out of the country to avoid tax. However, Amit Maheshwari, a partner at tax-consulting firm AKM Global, believes it will not be an easy task for the government to impose the levy since India still has no clear rules for the cryptocurrency market.
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