Crypto News
| Published On Jun 1, 2021 6:48 am CEST | By Peter Siu

India’s central bank says banks can not advise against crypto trading

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On Monday, the Reserve Bank of India (RBI) removed some of the uncertainty regarding the regulatory nature of cryptocurrencies in the country.

India’s central bank sent out a tweet saying that no bank in India should stop its customers from dealing in crypto assets citing an old 2018 circular that was successfully overturned by the Supreme Court of India in March 2020. This 2018 diktat prohibited banks and other financial institutions in the country from dealing in virtual currencies.

Despite the Supreme Court verdict, several Indian banks have continued putting up barriers for their crypto-enthusiast customers by sanctioning account closures if they do not stop trading cryptocurrencies.

In the statement released on Monday, the RBI said:

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“It has come to our attention through media reports that certain banks/regulated entities have cautioned their customers against dealing in virtual currencies by making a reference to the RBI circular dated April 06, 2018.”

The RBI further made it clear that banks need to comply with the Supreme Court’s verdict:

“Such references to the above circular by banks/regulated entities are not in order as this circular was set aside by the Hon’ble Supreme Court on March 4, 2020.”

“As such, in view of the order of the Hon’ble Supreme Court, the circular is no longer valid from the date of the Supreme Court judgement, and therefore cannot be cited or quoted from.”

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Due diligence

The RBI’s circular brings a sigh of relief for the Indian crypto community. Nonetheless the central banks stresses the importance of carrying out customer due diligence processes to fully comply with existing KYC, AML and other regulations such as combating financing of terrorism, and the Foreign Exchange Management Act (FEMA) for foreign remittances.

The recent statement could serve as a turn-around of sentiment in the country that of late has become very much anti-crypto. There is very well the possibility of a conducive regulatory environment for digital assets.

Peter Siu

Peter is a former poker-pro, turned crypto enthusiast with 8+ years’ experience in operational roles dealing with all online gaming verticals within large iGaming companies, including Flutter and Entain. Now an expert in the field of Sports Betting, Casino, iGaming, and Poker, he is our team leader and editor. When not working, Peter can be found in the gym or playing sports like football, tennis and more recently padel.