‘What is Bitcoin?’

‘How to buy a Bitcoin?’

The former was the second most searched ‘What is’ term and the latter, the third most popular ‘How to’ query in 2017, as per a Google Trends report. In 2018 though, don’t be surprised if you see ‘How to buy Bitcoin with cash’ instead.

That’s what it is coming down to as Indian cryptocurrency exchanges feel the heat from banks and the government. Exchanges are where users can buy and sell virtual currency like Bitcoin by paying for them digitally using bank accounts.

A source in the Union Home Ministry said that as in China, the Indian government, too, is looking to crackdown on exchanges. This is because there are concerns about cryptocurrencies being used for money laundering and tax evasion.

Over the course of the last few weeks, all top private banks—HDFC Bank, Kotak Mahindra Bank, Yes Bank, Axis Bank and ICICI Bank—have reportedly been asking the exchanges to close the accounts they hold with the banks. The top exchanges have about 1 million users each which see trading volumes of about Rs 150 crore ($24 million) a month.

“Account opening of entities dealing in trading of cryptocurrency or Bitcoin is prohibited” reads a notice from HDFC Bank, which The Ken reviewed. It adds that the bank won’t be accepting any new user or applicants who would be trading in cryptocurrencies and they are going to block the accounts of those who already deal in such currencies. The aforementioned banks did not respond to a detailed email with questions The Ken sent last week.

Dharani Venkatesan, a cryptocurrency trader told The Ken that his credit and debit cards belonging to HDFC Bank have blocked payments made towards crypto trading. “Earlier, I used to trade on cex.io and xapo.com using my HDFC Bank cards but two weeks back they stopped processing payments made towards these sites.”

“It turns out that they have stopped processing payments on all sites related to cryptocurrencies,” he adds.

But make no mistake. A crackdown on exchanges does not mean people will stop buying or selling cryptocurrency. It will simply move users to other channels like the over the counter (OTC) market, where one can buy cryptocurrency for cash. That’s what happened in China when exchanges were banned in September 2017. In India, the OTC channel is picking up.

OTC platforms like LocalBitcoins and Paxful, where currencies like US dollar, Rupee, among others, are exchanged for Bitcoins, are seeing a surge in India. And more such platforms are bound to crop up for every kind of altcoin (cryptocurrency other than Bitcoin) there is.