Blockchain & Crypto

RBI asks banks not to stop customers & exchanges from dealing in crypto

After reports that several banks are forcing crypto exchanges and traders to stop trading in cryptocurrency, the Reserve Bank of India has finally issued a compliance note. Acknowledging media reports that certain banks have cautioned their customers against dealing in crypto, RBI has clarified that the old 2018 circular that the banks are referring to is no more in effect.

In April, 2018, the RBI had issued a circular prohibiting banks from providing services to cryptocurrency exchanges. However, the Hon’ble Supreme Court in March, 2020, had set aside the circular. (Internet and Mobile Association of India v. Reserve Bank of India, W.P. (C) 528/ 2018)

Customer Due Diligence

The RBI, however, asked banks and other entities to continue to carry out customer due diligence in line with KYC, Anti Money Laundering, Combating of Financing of Terrorism as well as PMLA Act, 2002 and FEMA.

The tumultuous tale of cryptocurrencies in India

Amid reports that Indian banks are indirectly banning crypto exchanges, reports first emerged that the government may penalize possession of cryptocurrency. However, in a ray of hope, the government had asked companies and crypto exchanges to disclose crypto related transactions. It was also reported earlier this month that the government may establish a new crypto-regulation panel.

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Rohit Ranjan Praveer

Rohit is a practicing advocate at Delhi. Beginning as a tech enthusiast, Rohit always had a keen interest in computer forensics and information security. Building upon these fundamentals, he has undertaken extensive research on various techno-legal topics and continues his pursuit pass on valuable information to the masses, with a zeal to build something that outlasts him.​

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