Citibank India Bans Credit And Debit Card Use For Cryptocurrency Purchases Due To High Risk Involved
Citibank India which is one of the major banks in the Asian country has announced that it will no longer allow the use of credit cards or debit cards for any cryptocurrency-related purposes. This includes activities such as crypto trading and the general purchase of cryptocurrency for example for speculation purposes.
The Indian bank follows in the steps of numerous banks in the U.S that recently banned the use of credit cards for crypto trading owing to the highly volatile nature of the crypto market. This has led to huge losses for those trading cryptocurrencies and as a result, most of them have been unable to repay their credit debt.
VG Kannan, the Chief Executive Officer of the Indian Banks Association believes that other banks in India will most likely follow the same trend. This is because the central bank of India and the government have been warning investors to keep off cryptocurrencies due to the high level of risk involved.
Citibank India sent an email to its customers stating that: "[There have been] concerns, both globally and locally, including from the Reserve Bank of India, cautioning members of the public regarding the potential economic, financial, operational, legal, customer protection and security-related risks associated in dealing with bitcoins, cryptocurrencies, and virtual currencies,"
Anirudh Rastogi, the managing partner at an Indian law firm called TRA which represents numerous cryptocurrency businesses was however defensive about the move to ban credit and debit card use for digital currency transactions. In one of his statements, he pointed out that he believes that such a decision highlights the conservative nature of banks despite them justifying that it is necessary to curb risk.
Some analysts such as Ajeet Khurana, the head of the Blockchain and Cryptocurrency Committee are not so concerned about cryptocurrency purchases through credit cards and debit cards. This is because most of the purchases are made through internet banking. The Finance Ministry of India recently announced that cryptocurrencies are considered illegal by the government and that it aims to discourage people from using them. the Finance Ministry even described digital currencies as a Ponzi scheme.
Measures against cryptocurrency exchanges are already being undertaken. For example, the Indian Income Tax Department has been cracking down on cryptocurrency exchanges across India and it has also been on a mission to sniff out cryptocurrency traders. India is one of the countries whose regulators have expressed concerns about the use of cryptocurrencies and this has resulted in the negative performance of digital currencies such as bitcoin.