The Reserve Bank of India (RBI), India's central bank, has certified that crypto exchanges, businesses, and dealers are no longer barred from banking. This is in response to the Supreme Court's decision to overturn the RBI circular forbidding banks from providing services to customers who trade in cryptocurrencies. The prohibition was in place for over two years.
The Reserve Bank of India (RBI) has finally stated that no banking ban will be implemented.
In response to a Right to Information (RTI) request, the Reserve Bank of India verified that the crypto business is not currently subject to a banking prohibition.
B.V. Harish, the co-founder of Unocoin, India's largest cryptocurrency exchange, filed the RTI request on April 25. He wanted to know if the RBI has "prohibited any banks from providing bank accounts for cryptocurrency exchanges, firms, or traders." On May 22nd, the RBI responded:
As of right now, there is no such restriction.
The RBI circular prohibiting banks from providing services to anyone or any firm dealing in cryptocurrencies was invalidated by the Supreme Court of India in March, following many sessions. In April of 2018, a circular was issued. Following the court's decision, cryptocurrency exchanges began to reinstate INR support, which had been missing for nearly two years.
Despite this, some banks are apparently refusing to issue accounts for cryptocurrency exchanges, alleging that they are awaiting further orders from the RBI. The Economic Times reported Harish as stating, "Bankers have been suggesting that they need new RBI circulars mentioning that there are no longer any constraints on them providing bank accounts for crypto firms." "The RBI has now responded positively." The central bank, on the other hand, is not required to notify commercial banks of the supreme court's decision. The Reserve Bank of India (RBI) has previously stated that cryptocurrencies like bitcoin are lawful in India.
Following the lifting of the banking prohibition, several cryptocurrency exchanges saw 10X trading volumes and a significant rise in new customers. Despite the lengthy statewide shutdown, the crypto business is growing, despite economists predicting India's worst recession ever. In India, peer-to-peer (P2P) bitcoin markets are expanding, new crypto exchanges are emerging, and fresh investors are pouring in.
Meanwhile, the Indian government is still debating whether or not to regulate cryptocurrency, a process that has been slowed by the coronavirus outbreak and a statewide lockdown. The Indian government and the central bank were said to be exploring methods to regulate cryptocurrency in March.