‘There’s No Change In RBI’s Position’: Indian Central Bank Still Has Grave Concerns Over Cryptocurrencies

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Why India's Proposed Bitcoin Ban Will Be Downright Ineffective
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RBI’s notorious circular back in 2018 prohibiting banks from offering services to crypto firms may have been revoked in March 2020, but the central bank is showing no signs of changing its tune on crypto-assets.

RBI Governor Doubles Down On Anti-Crypto Policy 

Speaking during an online press conference on Friday, Reserve Bank of India Governor Shaktikanta Das indicated that the bank’s position of digital currencies has not changed, as reported by Bloomberg.

“There is no change in RBI’s position. We have major concerns around cryptocurrency, which we have conveyed to the government.”

Das’s comments come days after the central bank had been forced to clarify that local banks should not continue citing its old 2018 circular as a reason for withholding services to crypto businesses. 

“It came to our surprise that some banks were still referring to and citing that old circular in their correspondence with their customers,” Governor Das said. “We had to set the record straight that that particular circular of RBI has been set aside. So, therefore, it is not at all correct to refer to that circular.”

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Lack Of Clear Regulations Is A Challenge For Indian Investors

Bitcoin and blockchain regulation has had a rocky ride in India with the RBI lambasting cryptocurrencies time and again for supposedly causing financial instability and for facilitating money laundering and terrorism financing. Reports surfaced earlier this year that lawmakers in India were working on a fresh blanket ban on cryptocurrencies. Moreover, there have been several reports of crypto bans in the past, but none have become official to date.

Truth be told, the uncertainty around the nation’s crypto regulations has created a lot of confusion with some banks still avoiding working with crypto companies despite the RBI’s clarification that the outdated circular had been nullified. The net result? Millions of potential crypto investors remain on the sidelines.

While Das states that the central bank does not provide investment advice to Indians who wish to invest in cryptocurrencies, he emphasized that they should do their own due diligence and make careful calls regarding any crypto investments.

In the meantime, crypto enthusiasts are hoping that the Indian government will consider regulating crypto as an asset class instead of imposing a comprehensive ban.