Cryptocurrencies Banned In Indian Banks; RBI Will Launch Their Own Digital Currency!
This means that you won’t be able to buy bitcoins, Etherium or any other digital currency from your bank account.
This can be the final nail in the coffin for cryptocurrencies in India, at least the ones which are not ‘governed’ by RBI.
In a massive attack against bitcoins, and any form of digital currencies, Reserve Bank of India has banned banks from dealing with cryptocurrencies.
In layman terms, this means that you won’t be able to buy bitcoins, Etherium or any other digital currency from your bank account.
Meanwhile, at the time time, acknowledging the role of these new-age virtual currencies, RBI has again confirmed that Indian Govt.’s new cryptocurrency is coming soon.
Indian Banks Banned From Dealing With Digital Currency
In their first bi-monthly monetary policy for 2018, RBI has issued a strict warning against cryptocurrencies to all banks and all financial entities being regulated by them such wallets and payments banks.
Hence, from now on, any bank or wallet or any financial entity under RBI’s regulation won’t be able to buy or sell virtual currency.
The statement said,
“In view of the associated risks, it has been decided that, with immediate effect, entities regulated by RBI shall not deal with or provide services to any individual or business entities dealing with or settling [virtual currencies],”
In the US, bitcoins dropped its value after talks of regulation emerged, and it is rumoured that Indian Govt may soon officially ban bitcoins and other cryptocurrencies. Raids have already been conducted across Indian crypto-exchanges and firms, and dealers may be asked to close down as well.
As per RBI Deputy Governor B.P. Kanungo, cryptocurrencies can endanger existing financial balance and unleash mayhem.
“While the regulatory responses to these tokens are not uniform internationally, it is universally feared that they can adversely impact market integrity and capital controls. And if they grow beyond a critical size, they can endanger financial stability as well,”
RBI’s Own Digital Currency Coming Soon?
At the same press conference where the banning of all crypto trades was announced in Indian banks, RBI has confirmed that their own ‘fiat’ digital currency is coming soon, which shall be regulated and monitored by them.
As per RBI officials, an internal team is right now studying the feasibility of launching of such digital currency in the Indian market, and what impact it can have on the overall financial landscape.
RBI Deputy Governor B P Kanungo said,
“Several central banks are debating the possibility of introducing a fiat digital currency. As opposed to private digital tokens, these are issued by a central bank. They constitute liability of the central bank, and they will be in circulation in addition to the paper currency…”
He said that they acknowledge the role which digital currencies will play in the future of Indian financial market, but want them to be regulated and controlled.
We will keep you updated, as we receive more information on the state of cryptocurrencies in India.