Crypto Exchanges and Businesses in India Get A Green Light from RBI
In the last few months, India has been softening its stand on cryptocurrencies. India’s central bank - The Reserve Bank of India (RBI) - has confirmed that there’s no more the previous banking ban in India and that crypto exchanges, businesses, and traders are free to operate.
This decision from the RBI comes after the Supreme Court quashed the RBI circular which had earlier put a ban on any services related to cryptocurrencies. In response to the RTI (Right to Information) request, the RBI confirmed its latest decision.
Unocoin exchange co-founder B.V. Harish had filed the RTI query back on April 25. He asked if the RBI has “prohibited any banks from providing the bank accounts for crypto exchanges, companies or crypto traders”. In a response received on May 21, the RBI said: “As on date, no such prohibition exists”.
Since early 2018, the RBI had introduced an absolute ban on banks to deal with any crypto related businesses and services. The ban lasted for almost two years after the Supreme Court quashed the RBI circular earlier this year in March 2020.
Soon after the Supreme Court lifting the ban, crypto exchanges have started bringing back the INR support to their platform. However, some banks are still waiting on the sidelines to receive any further guidance from the RBI regarding crypto-related operations and thus have refused to resume operations for the time-being.
Speaking on this matter, Mr. Harish said: “Bankers have been saying that they need new RBI circulars mentioning that there are no more restrictions for them to provide bank accounts for crypto businesses”.
Soon after the banking restrictions were lifted, Indian crypto investors and enthusiasts have been seen rushing to crypto exchanges. Several crypto exchanges are seeing a substantial surge in the users as well as the trading volumes have surged 10X.
Just like all other major economies, India is currently dealing with the economic challenges posed by the COVID-19 pandemic. While the country has been in the lockdown for almost the last two months, the country’s businesses have taken a major hit.
On the crypto front, new exchanges have flourished and investments are flowing in. On the other hand, the Indian government has yet to come with clear regulatory measures for the functions of digital assets.