IDFC First Bank, a private sector lender, has made the most significant decision regarding cryptocurrency transactions. IDFC’s first bank said today that transactions would be restricted to the cryptocurrency industry, i.e., persons who have an IDFC bank account will not make cryptocurrency transactions via their accounts.
IDFC First Bank has repeatedly suspended services related to cryptocurrency exchanges in the last few months. Perhaps it was clear that the bank is not yet ready to support the virtual cryptocurrency.
ICICI Bank, Yes Bank, and Paytm Payments Bank have all cut connections with the cryptocurrency market. In addition, HDFC Bank customers and the State Bank of India have also been warned against dealing in virtual currencies like Bitcoin. This caused the Reserve Bank of India to issue a clarification on its 2018 circular. Although there was no official notification, the RBI had previously informally advised banks to steer away from companies dealing in cryptocurrencies.
The problems started in 2018 when the Reserve Bank of India issued circular ordering banks and financial institutions to refrain from providing services to cryptocurrency exchanges. However, the Supreme Court overturned the RBI round in 2020, allowing several exchanges to restore operations in India.
There are around 15 million cryptocurrency investors in India, with a total value of 10,000 crores in digital assets. As a result, the government may hesitate to make any decisions that may influence this large Indian investor. Unfortunately, such moves also upset cryptocurrency investors for the wrong reason.
Shivam Thakral, CEO of BuyUcoin, commented on the issue, “The root cause of the problem is the unregulated tag of the crypto industry in India. Since the industry is unregulated, it creates confusion among the services providers as there are no set guidelines. Therefore, we need to address the larger policy issues to unlock the true potential of digital asset economy in India.”
We are all aware that a single tweet and even an announcement from large major traders impact the crypto market. Bitcoin has again dropped, increasing the risk of losing investment by this unfortunate market instability. Unfortunately, it may be the cryptocurrency market if there is maximum instability in the market.
Perhaps due to the tremendous instability and significant financial risks, cryptocurrency is not supported by Indian banks. Most of the crypto-investors in India now wait for the final announcement about the legitimacy of the cryptocurrency in India. The chaos may be inferred from the rising number of cryptocurrency investors in India and the quickly expanding number of cryptocurrency exchanges based in the country.