The new business relationship between Kotak and WazirX will allow investors trading on the platform to pay and receive money through the bank account.
Leading Indian bank Kotak has become the first bank in India to embrace the crypto-community. The top-rated private bank opened its doors to the crypto ecosystem by allowing Indian-based Crypto exchange WazirX to open an account with its establishment.
Recall that despite the reversal of the ban against crypto firms last year, Indian banks have refused to do business with crypto exchanges. Earlier in 2018, the RBI banned banks from allowing payments for cryptocurrencies from their platform. In March 2020, the Supreme Court set aside the ruling giving banks the liberty to pursue business with the crypto firms.
However, since then, many banks still sideline the crypto firms. Many have cited the unclear stance of the Indian government on cryptocurrencies as their reason. For about eight months, several of these banks froze the payments system of the crypto exchanges.
Under such threats, WazirX closed its account with ICICI. Since then, most of its transactions moved to MobiKwik, a digital wallet, and payment service firm.
Kotak and WazirX: Changing the Narrative
With Kotak taking the lead in style, many other banks and investors are sure to follow suit. The new business relationship between Kotak and WazirX will allow investors trading on the platform to pay and receive money through the bank account.
As of November 2021, Kotak was the third-largest private sector bank based on assets and market capitalization. Some have interpreted the bank’s move to mean that the country is only interested in regulating cryptocurrencies instead of banning them outrightly.
The position of other leading banks like Axis, HDCF, and SBI remains unclear in the situation. There are also suggestions the bank is keeping up tabs with Zebpay, a crypto-exchange.
Kotak’s Move Could Shape Crypto Policy
Taking all these together, some experts opine that growth will be exponential once the cryptocurrency bill is passed. Speaking about the development, OKEx Chief Executive Officer, Jay Hao had this to say;
“When we entered the Indian market early this year, we were optimistic about India’s strong policy framework.” Hao expressed his joy about Indian’s strong policy framework and how it could help shape India’s crypto policy.
Hao believes that regulation (instead of banning) will improve India’s market appeal to investors. In return, this will cause more foreign exchanges to enter and develop the required technical equipment and hire skilled employees to run the operation.