In Brief:
- Paytm to consider Bitcoin offerings to its customers and merchants in India
- The uncertainties on Bitcoin’s legal status and regulatory clarity are preventing Paytm from launching its offerings.
India’s largest payments provider, Paytm, is preparing for its Bitcoin offerings to over 300 million customers and 20 million merchants. This step has been put on hold due to regulatory uncertainty and the legality of Bitcoin.
Paytm’s chief financial officer, Madhur Deora, said in a Bloomberg interview that If the country’s regulatory authorities were to approve Bitcoin, Paytm could get involved. He also stated that Bitcoin is still in a regulatory grey area even though the ban was lifted last year. He further clarified that as of now Paytm does not do Bitcoin but would definitely launch its Bitcoin-related offerings once it becomes fully legal in the country.
The Indian central bank had banned banks and other regulated financial entities from dealing with Bitcoin and other crypto-assets back in 2018. However, the Supreme Court lifted the ban in March 2020. This has cleared some of the uncertainties around the legal status of cryptocurrencies. Consequently, contributed to the rapid rise in trading volumes.
Though the regulatory clarity over Bitcoin’s legal status has always been the issue. In May this year, many banks started sending formal warnings to cryptocurrency investors saying they will not process crypto-related transactions as RBI does not permit it.
These banks justified their warning by saying that they don’t have any formal direction on how to deal with cryptocurrency transactions, and hence they are following the RBI’s 2018 circular. The finance ministry of India proposed to regulate cryptocurrency rather than totally banning them in March yet it lacks regulatory clarity till date.
The uncertainties surrounding Bitcoin adoption in India haven’t stopped local crypto exchanges like Coinswitch Kuber and CoinDCX. Coinswitch last month emerged to raise a new round of funding value at $2 billion entering into the unicorn club, after CoinDCX.
