India Bans Bitcoin and All Cryptocurrency Purchases

India Bans Bitcoin and All Cryptocurrency Purchases

India Bans Bitcoin and All Cryptocurrency Purchases

"They constitute liability of the central bank, and they will be in circulation in addition to the paper currency that we have", said deputy governor of RBI B P Kanungo.

Those issues have emerged in a country that represents a sliver of the global bitcoin market: Rupee transactions account for just 0.02% of the currency's trading, according to CryptoCompare. He stated that, despite this decision, the country has no plans to ban cryptocurrencies.

On Thursday, the Reserve Bank of India mandated banks, e-wallets, and payment gateway providers to withdraw support for cryptocurrency exchanges and other businesses dealing with virtual currencies in India.

The RBI, however, gave banks and other entities which are regulated by it and now providing such services to exit the relationship within a period of three months.

India's central bank said the currencies' underlying blockchain technology made it hard to protect consumers from scams, and to prevent money laundering.

The Reserve bank of India barred banks on Friday from having any links to virtual currency dealers, slashing the prices of bitcoin and other crypto-currencies on local exchanges. The report on the same is expected by end-June 2018.

The central bank had been cautioning users against making digital currency-related investments. Government will literally separate banking from cryptocurrencies via the legal system.

Indian authorities stopped short of a total ban on digital currencies.

"Several central banks are debating the possibility of introducing a fiat digital currency as opposed to the private digital tokens".

In the statement, the RBI deputy governor added that "digital tokens issued by private parties are getting worldwide attention for quite some time for their speculative value".

"There are no proven instances of cryptocurrency aiding illegal activities, and the debilitating environment created for cryptocurrencies in India will only force Indian investors and exchanges look towards other countries for trading in bitcoin and other cryptocurrencies", said Ritesh Modi, Blockchain expert and author. It is evident that the Indians are enthusiastic about the cryptocurrency revolution but repeated warnings from the government have caused fear among the people. "Technological innovations, including those underlying virtual currencies, have the potential to improve the efficiency and inclusiveness of the financial system", said the RBI's Statement on Developmental and Regulatory Policies.

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