When the Reserve Bank of India (RBI), the country’s apex bank, set aside a 2018 circular and said that banks could no longer use it as a reason to halt the trading of cryptocurrencies, it gave rise to various misinterpretations, the most common of which stated that the RBI was endorsing cryptocurrencies. Unsurprisingly, this move was welcomed by investors and all those associated with the crypto industry.
On Friday, the RBI squashed all speculation and gossip and reiterated that it continues to have major concerns over cryptocurrencies. RBI Governor Shaktikanta Das said in a post monetary policy press meeting that there was no change in RBI’s position towards cryptocurrencies and that they had conveyed their concerns to the government.
His statement puts a decisive end to the speculation that the RBI was endorsing cryptocurrencies. It also comes less than a week after the RBI sent waves through the crypto industry after it set aside a 2018 circular and asked banks not to cite it to prevent crypto transactions. The circular, dated April 6, 2018, prohibited banks from dealing in cryptocurrencies or offering any service to customers regarding such transactions. The circular had been challenged in the Supreme Court, and the RBI finally held it no longer valid recently. Since it has been struck down by the Supreme Court, it cannot be cited or quoted from. However, some banks, including HDFC Bank, continued to do so to deny transactions of cryptocurrencies.
“It came to our surprise that some banks were still referring to and citing that old circular in their correspondence with their customers,” Das said. “We had to set the record straight that that particular circular of RBI has been set aside. So, therefore, it is not at all correct to refer to that circular.”
While the central bank continued to express concerns, it made known that it was neither endorsing nor banning the currency that has a strong presence globally but has not reached the same level of success in India so far. However, more and more Indians are hopping on to the trend recently. Das said that the RBI would not be advising investors about their decisions, and it was up to each and every investor to “make his own appraisal, to do his own due diligence, and take a very careful call with regard to his own investments.”
India, a country that was once completely against cryptocurrencies and had banned them, has opened up to the future of transactions in the recent months. At the start of the year, a bill was introduced seeking to ban all private cryptocurrencies in India, but since then, there have been various indicators that the country’s approach would be calibrated. That being said, today’s news will come as somewhat of a disappointment to Indian crypto enthusiasts.
