Cryptocurrency has not had an easy time in India. Not only was it banned in the country, both private and public sector banks in the country have been against investing in cryptocurrencies. However, it looks like tides are turning, as investors now have a cause to rejoice, after the Reserve bank of India overturned a 2018 circular and confirmed that the trading of cryptocurrency is no longer banned in the country.
The decision by the apex court gives an insight into the position of cryptocurrency in the country. The RBI told in its circular that banks could no longer use the 2018 circular as a reason to hinder the trading of cryptocurrencies. The 2018 note had forbidden banks from facilitating such transactions.
The clarification came after lenders such as HDFC Bank Ltd, nation’s largest private-sector bank, and the State Bank of India (SBI), one of India’s biggest credit card issuers, cautioned customers through emails against dealing in virtual currencies such as bitcoin, citing the circular, warning customers of penalties, including the permanent closure of their accounts. Cryptocurrency can be used in illegal activities like money laundering and funding terrorism.
HDFC Bank requested customers to visit the nearest branch within 30 days to clarify the nature of these transactions, while SBI warned its clients that the usage of its credit cards for transactions on virtual currency merchant platforms may lead to the suspension or cancellation of these cards.
“The circular is no longer valid from the date of the Supreme Court judgment, and therefore cannot be cited or quoted from,” the RBI said. “Banks must continue with other routine due diligence measures on the deals,” the circular added.
However, this does not mean that the RBI is directly endorsing cryptocurrencies.
Nonetheless, executives of the crypto currency industry are elated at the news, saying that it has brought much-needed clarity.
“This is the most significant statement to come out of RBI since the 2020 Supreme Court verdict. It will give respite to crypto exchanges, which were struggling to get a bank account due to lack of clarity from the RBI,” said Sharan Nair, chief business officer of crypto exchange Coinswitch Kuber.
Nischal Shetty, founder and CEO of WazirX, said, “The entire crypto community is relieved. We’ve been waiting for clarity from the RBI and now we finally have it,” he said.
The broader concerns of the apex bank of the country and the concerns on part of the banks around money laundering should help to spur regulations and make the industry safer and stronger, said Sumit Gupta, CEO and co-founder of crypto exchange CoinDCX.
India’s administration has also been seeming more and more acceptable of crypto in the last few months. Earlier this year, a bill was presented to possibly ban all private cryptocurrencies in India, but since then, there have been multiple indicators that India is ready for the currency of the future. In case you are planning to invest in cryptocurrencies, you can get some quality crypto trading signals on the web, to help you make your decisions.