The logo of the digital currency Tether in this photo illustration. Photo: AFP / Alexander Poh l/ NurPhoto

While the Indian government is scheduled to introduce the Cryptocurrency and Regulation of Official Digital Currency Bill 2021 during the ongoing session of Parliament, the Kotak Mahindra Bank has decided to do business with crypto exchange WazirX.

The country’s third-largest private bank has allowed WazirX to open an account to receive and pay money to investors trading on the exchange. The account is yet to become operational and is undergoing various procedures related to the opening of the account.

The bank is also reportedly in talks with crypto exchange Zebpay, the Economic Times reported.

WazirX, India’s largest crypto exchange, almost closed its account with the ICICI Bank a year ago after the Reserve Bank of India sent feelers to the bank about an impending ban on digital currencies. The bulk of WazirX’s business then shifted to digital payment services company MobiKwik.

A number of other banks such as HDFC Bank, Axis Bank and the country’s largest lender, the State Bank of India, reduced their exposure to crypto platforms and vendors after being approached by the central bank.

The Reserve Bank of India continues to oppose cryptocurrencies as it feels they do not function under any regulatory framework laid down by any central bank. In fact, Governor Shaktikanta Das has repeatedly opposed digital currencies as he feels they could upset the country’s macroeconomic and financial stability.

He recently lamented that no “serious, well-informed discussions” were taking place in the public space on these issues.

However, deputy finance minister Pankaj Chaudhary said in Parliament that a proposal from the Reserve Bank of India was received to start its own cryptocurrency. “Reserve Bank has been examining use cases and working out a phased implementation strategy for the introduction of Central Bank Digital Currency with little or no disruption,” he said.

Finance Minister Nirmala Sitharaman recently told Parliament that it had no proposal to recognize Bitcoin as a currency. The government also stated that it does not collect data on Bitcoin transactions.

The country’s cryptocurrency industry recently urged the government to take a nuanced approach towards regulating crypto assets in India. They expressed a hope that the proposed bill would accommodate the aspirations of Indian crypto owners, Indian crypto entrepreneurs and investors who had put their faith in the growth of India’s cryptocurrency market.