Indian Central Bank Says Cryptocurrency Not Banned, But Asked Regulated Entities to Refrain From Indulging
The growing dominance of digital assets is forcing regulators and governments to reconsider their harsh stand on digital currencies.
Earlier this week, Indian Central Bank - The Reserve Bank of India (RBI) - clarified its position on the ban of cryptocurrencies. Speaking on this matter, the RBI said that the central bank has banned all the regulated entities from involving in any crypto-related businesses.
However, it added that this is not equal to the overall ban on virtual digital assets. In an article on January 21, local news publication The Economic Times reported of a document submitted by the RBI to the Indian Supreme Court.
While staying unclear on its stand on digital assets for a long time, the Indian Supreme Court had asked the government and the respected ministries to come clear on the matter of cryptocurrencies.
Responding to the Supreme Court’s query, the RBI said: “Firstly, the RBI has not prohibited VCs (virtual currencies) in the country. The RBI has directed the entities regulated by it to not provide services to those persons or entities dealing in or settling VCs”.
Almost two years back in April 2018, the RBI had asked all the regulated banking institutions to discontinue their operations with local exchanges and any other crypto-related activities.
The RBI wrote: “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 VCs.”
But it looks like with global regulators and governments institutions leaning towards digital assets, RBI would like to remain neutral at this stage instead of having a strong handed approach.
Bigger economies like China, the U.S., and Japan are now exploring central bank digital currencies. China which had previously banned public cryptocurrencies in the country has accelerated its work on Digital Yuan.
With global organizations like Facebook entering the crypto space, China found that it is imperative for them to embrace the digital currency revolution if it has to stay as a dominant economic powerhouse.
On the other hand, the U.S. and the EU have also been exploring the use cases of digital currencies that can benefit the global trade and commerce.