|The Reserve Bank Of India made its customers confirm that cryptocurrencies are not illegal. They made it clear that banks are unable to shut their Crypto account.|
Reserve Bank of India Confirms That Cryptocurrencies Are Not Illegal
Customers of the Reserve Bank of India confirmed that cryptocurrencies are not illegal. They stated that banks cannot shut off their Crypto account.
It has also enabled financial institutions to conduct due diligence on consumers who are involved in digital assets:
“Banks and other entities mentioned above may, however, continue to conduct customer due to diligence processes following regulations governing standards for Know Your Customer (KYC), Anti-Money Laundering (AML), Combating Financing of Terrorism (CFT), and obligations of regulated entities under the Prevention of Money Laundering Act (PMLA), 2002, in addition to ensuring compliance with the rules of the Foreign Exchange Management Act (FEMA) for foreign remittances.”
Customer Due Diligence for transactions in Virtual Currencies (VC)https://t.co/iAUAx8KpRh
— ReserveBankOfIndia (@RBI) May 31, 2021
Banks Sends E-Mails To Their Consumers
In recent weeks, major banks such as HDFC Bank and SBI Card have publicly warned their customers against engaging in cryptocurrency transactions, citing the RBI’s 2018 circular.
The circular is no longer valid, according to the central bank.
“As a result, in light of the Hon’ble Supreme Court’s order, the circular is no longer valid as of the date of the Supreme Court verdict, and hence cannot be referred or quoted from.”
Indians Are Exposed To Crypto Market
Although RBI and the government have not developed a position on cryptocurrencies, many Indians have invested in the crypto market. According to cryptocurrency exchange data, nearly 1.5 crore Indians have invested in cryptocurrencies, totaling Rs 15,000 crore.
There are 350 blockchain and cryptocurrency firms. Crypto exchanges, such as WazirX, CoinSwitch Kuber, and others, have seen a surge in customer demand, and crypto exchanges are extensively advertising on investments.
While the RBI is opposed to the use of Bitcoin as a medium of exchange. The Cryptocurrency and Regulation of Official Digital Currency Bill, 2021, has been suggested by the government. The Bill includes provisions that make all bitcoin transactions illegal.