Kotak Mahindra To Partner With Cryptocurrency Exchange WazirX, Account Can Be Used By Investors To Receive And Pay Money For Trading

Kotak Mahindra Bank has opened its doors for cryptocurrency trading

Kotak Mahindra has become the first major bank in India to open doors for cryptocurrency trading. It has decided to open an account with WazirX exchange to receive and pay money to those trading on the exchange, amid increasing perception that the government does not intend to ban cryptocurrency but is keen to regulate it. Most major banks had ceased payments in a few months ago, fearing a blanket ban on digital assets. Also, the Reserve Bank of India (RBI) had repeatedly flagged its concerns over the unpredictable consequences cryptocurrency would have on the existing financial system that is driven mainly by fiat currency.

Multiple reports said that Kotak has opened an account with WazirX and the necessary paperwork and test runs were on. If all goes well, the partnership would allow investors trading on WazirX to pay and receive money through the bank account. However, no official announcement has been made so far by the two parties.

The news comes as the government considers legislation to regulate the future of cryptocurrencies in the country. For eight months, most high-profile banks in the country had frozen cryptocurrency payments.

A report in NDTV stated, according to the proposed legislation to regulate cryptocurrency in India, people, and organisations who violate the government’s rules on crypto finance will face fines of up to Rs 20 crores and a 1.5-year prison sentence.

In April 2018, the RBI had prohibited banks from supporting crypto transactions. A year later, the Supreme Court revoked the ban. In May this year, the RBI cited the Supreme Court ruling and clarified to banks that they can now engage in the cryptocurrency market. But most banks waited to see how this new RBI directive was received by the market and also whether the government bans trading in cryptocurrency.

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