One of the leading exchanges in India is closing, citing rising expenses and problems finding a banking operator.
The India-based market operator Coindelta closed over the weekend, entering a 30-day withdrawal period for any assets left on the exchange wallets. The market company cited problems with finding a banking provider after Indian regulators started to curb local exchanges from handling cash.
India is one of the hotspots for cryptocurrency activity, although the local regulators are attempting to curb crypto-to-fiat conversion in a bid to turn locals to using banks. India also goes through a cash demonetization process, to discourage the creation of a grey economy.
The exchange explained the situation through its blog:
“It has been really difficult for us to operate Coindelta exchange for the last 6 months. The curb on the bank accounts by RBI [Reserve Bank of India] has made us handicapped in order to provide seamless deposit and withdrawal services. There has not been any significant progress in the Supreme Court case which makes it difficult to predict when we will see the regulation.”
The refusal of banks to service digital asset exchanges is a worldwide phenomenon, with Asian exchanges the most affected in some countries. But there have been examples in Europe where local banks decide against serving the business of cryptocurrency brokers. So far, most leading exchanges are managing to find a banking partner, including Binance, but also prominent brokers like Coinbase or Bitpanda.
The Coindelta team has opened the exchange for withdrawals only, after a trading freeze on March 30. After the 30-day withdrawal period, the market operator will only refund digital assets through contacting a specialized support website.
The Coindelta exchange managed to survive as a broker for about 18 months, a period that coincided with an extended bear market and a dropping price for Bitcoin (BTC).
At the same time, digital asset innovation continues in India, as developers and startups are still seeking the potential in the crypto sector. Recently, the Bitbns service unrolled a cryptocurrency payment debit card, in addition to its payment ecosystem and wallet.
Presenting #BitbnsPay! We’re giving away 1000 Bitbns Pay to 1000 people. All you have to do is retweet this Hardware Wallet & Debit Card delivered to your address for free! #TheFutureofFinanceIsHere. Check out contest rules here: https://t.co/08ZwDjyBcE pic.twitter.com/wmpQZTbJgy
— Bitbns (@bitbns) April 1, 2019
In India, a decision on the government’s stance for digital coins is expected in the coming weeks. Unless the government comes up with a clear stance and regulation, the Supreme Court of India will have to draft legislation on the nature and legality of digital assets.