Reserve Bank of India Confirms No Banking Ban for Crypto companies in India
As a response to the RTI query filed by Indian Crypto exchange Unocoin’s Co-founder B V Harish, India’s central bank - the Reserve Bank of India has cleared that it does not prohibit banks to offer their services to the crypto exchanges, crypto firms or trading account holders.
The RTI query was filed on 25 April 2020 almost one month following the decision of the Supreme Court of India to legalize the use of cryptocurrencies.
In the RTI query, B V Harish had sought the explanation from the RBI if it has prohibited any banks from providing the bank accounts for crypto exchanges, companies, or crypto traders.
In response, the RBI stated on May 22:
“As on date no such prohibition exists”
Following is the part of the RBI’s reply to B V Harish
Reply from RBI
Is the RBI prohibited any banks from providing the bank accounts for crypto exchanges, companies or crypto traders.
As on date no such prohibition exists.
Why the Right to Information (RTI) query was filed?
Back in April 2018, The RBI had released a circular ordering the Indian banks to not to deal with the crypto industry. This circular was challenged by the crypto community in India through several lawsuits in Supreme Court. After almost 2 years of legal battle in March 2020, The Supreme Court of India quashed the RBI ban and allowed the banks to provide services to the crypto industry in India.
Even after the verdict, the RBI had not released clear guidelines to the banks about dealing with the crypto companies. Subsequently, several banks were declining to deal with the crypto-related firms.
To clear this uncertainty and ambiguity, B V Harish had thus sought RTI query to the RBI to clear its stand on the prohibition.
The Current Status of Crypto Industry in India
Amid the Corona Crisis, the Indian economy which was already in abysmal is in deep shambles but the crypto industry in India is following the worldwide trend of boom in here as well.
New exchanges are launching, investments are pouring in, users are growing and overall a positive wave can be witnessed amid the economic crisis.Meanwhile the Indian government was supposed to introduce a Bill in January 2020 regarding the digital currency policies. In March it was even in discussions with the RBI regarding the regulations of the cryptocurrencies. But with the ongoing lockdown, due to the corona pandemic, the policies are kept on hold.
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CBW - External Analyst