Kotak is partnering with WazirX. Kotak Mahindra Bank is an Indian Bank that deals with private lending, whereas WazirX is a cryptocurrency exchange in India, which was on a payments freeze for eight months.
In support of the growing perception in India that cryptocurrency should be regulated and not banned, Kotak is partnering with WazirX. The cryptocurrency exchange platform, which was crashing, is now coming back to life after the partnership.
WazirX has opened an account with Kotak that allows for the transfer of fiat and cryptocurrency. Using the account, traders and investors on the exchange are able to make payments. However, the account is still in processing for now, hence not yet operational. The account is currently undergoing KYC, paperwork, and testing to affirm its security and validity.
WazirX: India’s Affected Bank Crypto-Partnerships
Several reasons made Indian Banks avoid cryptocurrency partnerships, for example, concerns by India’s Central Bank, India’s Reserve Bank, and the Government of India.
About a year ago, India’s Central Bank voiced its concerns about cryptocurrency. Following this concern, WazirX closed its account with ICICI Bank, India’s second second-largest private money-lender.
As a result, a large part of WazirX moved to MobiKwik, a digital wallet and payments wallet in India. ICICI even ordered the payments gateway operators to deactivate the ICICI Netbanking for traders with large inflow and outflow of cryptocurrency trades.
The Reserve Bank caused other lenders, such as Axis, HDFC, and SBI, to move away from any cryptocurrency-related partnerships or payments. This hit India’s cryptocurrency market hard. Rumors that the Indian Government might ban cryptocurrency also made Banks and money-laundering institutions in India avoid any cryptocurrency partnerships.
Cryptocurrencies Could Emerge as a New Growing Asset in India
However, it is a relief that the Indian Government announced it is working to regulate cryptocurrency rather than ban it. The Indian government is working on a cryptocurrency bill that will allow the Securities and Exchange Board of India to regulate the cryptocurrency community.
Kotak is planning to partner with more cryptocurrency exchanges in the future, too, for example, Zebpay. Cryptocurrencies could emerge as a new growing asset in India. It is wise for the government to regulate the cryptocurrency market in India rather than ban it. Kotak partnering with WazirX is a bold step, and it encourages other banks and institutions to follow suit. Everybody is early to cryptocurrency, and it is never too late to get in. The bear markets are only for a while.
Banks partnering with cryptocurrency exchanges will help stabilize the cryptocurrency markets and increase cryptocurrency awareness. The dips will no longer be irregular but predictable. It will help secure the cryptocurrency world and protect users from online scams and cyber hacks. Therefore, Kotak partnering with WazirX is a good thing.