Reserve Bank of India Confirms Crypto as Legitimate currency

Reserve Bank of India

June 1, 2021

Reading Time: 2 minutes

Cryptocurrencies are now legitimate according to the Reserve Bank of India. However, they proved that banks could not close a customer’s Crypto account.

Cryptocurrencies are legal. According to the Reserve Bank of India customers, they asserted that banks could not close their Crypto accounts.

It has also made it possible for financial institutions to do due diligence on customers who are engaged in digital assets.

According to the Reserve Bank of India, however, under regulations governing Know Your Customer (KYC), Anti-Money Laundering (AML), Counters of Terrorism Financing (CFT), and the obligations of regulated bodies according to the Prevention of Money Laundering Act (PMLA) of 2002. Therefore, banks and other entities mentioned above may continue to conduct their customers due to the due diligence procedures.

Banks Sends E-Mails to Their Consumers

In recent weeks, prominent banks, including HDFC Bank and SBI Card, have openly advised their clients to avoid cryptocurrency transactions, citing the RBI’s 2018 circular.

According to the central bank, as a result of the Supreme Court’s judgment, the circular is no longer effective as of the date of the Supreme Court ruling and so cannot be referred to or quoted from.

Indians Are Exposed To Crypto Market

Even though the RBI and the government have not taken a stance on cryptocurrencies, many Indians have invested in the market. Data from bitcoin exchanges show that about 1.5 crore Indians have invested in cryptocurrencies, totaling Rs 15,000 crore.

There are about 350 blockchain and cryptocurrency companies. WazirX, CoinSwitch Kuber, and other crypto exchanges have experienced an increase in client demand, and crypto exchanges are heavily promoting investments.

While the Reserve Bank of India is opposed to the use of Bitcoin as a means of exchange, the government has proposed the Cryptocurrency and Regulation of Official Digital Currency Bill, 2021.  According to provisions included in the bill, all bitcoin transactions are illegal.

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