In India, banks have not been cooperating with users or exchanges regarding crypto transactions. HDFC and SBI have even sent out notices to users saying crypto is banned, citing the 2018 ban circular. This has taken over the internet, and users have been coming on Twitter asking answers for the same. So, RBI took steps, saying that the 2018 crypto ban is no longer valid and banks should stop quoting it. They also mentioned how the supreme court had overruled their decision on crypto. So, I think we can accept that such documents won’t be sent out from banks anymore.
RBI’s complete statement
In 2018, the RBI banned crypto in India and refrained from companies working with banks. But the decision was quashed by the supreme court of India are it called crypto legal. So, the Reserve bank of India has made it clear with their notice that the banks are not allowed to cite the already discarded ban letter from 2018. They also said that the banks could do their due diligence on the same and take risks accordingly. This means banks can continue to have a closer look at exchanges and transactions in crypto and regulate them for any money laundering, acts of terrorism, or something else.
What does this mean for Indian crypto exchanges?
I don’t think it will create much of a difference because RBI said that banks could do their own due diligence. We can expect that users won’t receive any more such emails or letters, but it is not sure if exchanges will get banking services. For that to happen, we will need proper crypto regulation in the country. It is reported that the Indian government is planning to set up a panel that will bring proper laws and makes crypto transparent in the country.
But till now, there is no report on when these laws will be implemented or even formulated. So, for now, the only option for crypto exchanges is Mobikwik and p2p trading. But this will result in lower volumes because most of the people don’t actually know how to do p2p trading. And on the other hand, some don’t trust it, so there’s that.
Atleast from the user’s standpoint of view, there is a sign of relief as this reports were creating panic among investors. It is obvious if someone new in the industry gets a message that crypto is illegal, they will think the same and maybe stop trading. Banks should let customers use their money as they seem fit and not interfere in between.
What are your thoughts on the announcement made by RBI regarding the 2018 crypto ban? And do you think this will make banks work with crypto exchanges? Let us know in the comments below. Also, if you found our content informative, do like and share it with your friends.