Paytm Payments Bank has announced that it will not allow cryptocurrency transactions through its platform from Friday (May 21) evening as it will stop dealing with crypto exchanges, The Economic Times reported.

This development came after banks on May 20 said that they would no longer deal with crypto exchanges following an “informal” RBI order to that effect.

The CEO of a cryptocurrency exchange had confirmed to on May 20 that Paytm Payments Bank was ending their support “tomorrow (Friday) EOD (end of the day)”.

According to the Economic Times report, a CEO of a cryptocurrency exchange had confirmed this to the newspaper on May 20. However, Paytm bank neither gave them any official reason for this nor told them if this was due to any regulatory issues, the report added.

Earlier this week, the Reserve Bank of India (RBI) had “informally” asked the banks to reconsider their ties with cryptocurrency exchanges like WazirX, BuyUCoin and Zebpay, following which the lenders on May 20 said that they would no longer deal with them.

The central bank even “directed” the payment companies to cut ties with these exchanges, in an “informal” order, similar to the one sent to the banks, the ET reported quoting RBI sources.

A number of crypto exchanges have said that other payment service providers have also indicated their “intention to withdraw support”, according to the report.

The development comes as the government gears up to bring in new regulations for cryptocurrency trading in the country. The government is looking at possibilities to regulate digital currency instead of banning it altogether.

The Centre is likely to form a panel of experts whose role could be to study the use of blockchain for technological enhancement and recommend ways to regulate cryptos as digital assets instead of a currency.

The Union Finance Ministry is monitoring the growing volume of cryptocurrency trading in the country and is also in discussion with the stakeholders.

First Published:May 21, 2021 4:43 PM IST