The Reserve Bank of India (RBI), India’s central bank, has stated finally that crypto trading restrictions are no longer in place and followed to clarify a letter that provoqued confusion, previously addressed to bank account holders.
Two of India’s top banks, HDFC and SBI, sent account holders notifications last Friday warning that cryptocurrency transactions are “not permissible as per RBI guidelines.”
The banks cited an RBI document from April 2018 that prohibited entities regulated by the Reserve Bank to deal in cryptocurrencies or offer services to facilitate any person or entity in dealing with or settling cryptocurrencies.
RBI Protects Crypto Transactions
The RBI has now stated that the guidelines are no longer in effect. On March 4, 2020, the country’s Supreme Court reversed the verdict, declaring in favor of Indian cryptocurrency investors and overruling the RBI’s ban.
“As of the date of the Supreme Court judgment, the circular is no longer valid and so cannot be referred or quoted from,” RBI noted.
Banks are only allowed to conduct due diligence processes under existing standards in order to comply with anti-money laundering and other anti-terrorist funding legislation.
Still No Certainty For Indian Crypto Users
The lack of clarity surrounding India’s crypto legislation has caused a great deal of consternation. In March 2021, it was reported that Indian regulators were considering imposing a blanket ban on cryptocurrency.
Many additional allegations of a crypto ban have surfaced in the past, but none have been confirmed. The apex bank’s directive today shows that regulators are not inclined to impose any more restrictive rules.
Crypto is Being Put Under the Microscope Globally
In India and elsewhere, banks despise cryptocurrency investors because they deposit big amounts of money in the bank and then wire it to a wallet or exchange that converts it to crypto.
Banks don’t want a lot of “in and out” transfers since they don’t want to be a part of any dysregulated and potentially unlawful activity
Governments worldwide don’t really like Bitcoin either, considering it as the first decentralized peer-to-peer payment network that is powered by its users with no central authority or middlemen.
The lack of central authority is likely the reason why governments are afraid of crypto.