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Central Bank of India’s approach to cryptocurrency

The controversial position of the Central Bank of India hindered the activities of companies related to the crypto industry. What is the situation now and how does it affect the world of crypto?

Position of the Central Bank of India 

The Reserve Bank of India (RBI) finally issued its position paper on financial services to crypto companies. The RBI explains that there are currently no restrictions or prohibitions on banks to serve their related customers.

The reply of the Central Bank of India to the request made by Harish BV, co-founder of the Indian crypto exchange, ‘Unocoin’, opens the door for private entrepreneurs or large companies to operate in the crypto industry in the country.

Supreme Court decision 

In 2018, the Central Bank of India limited all regulated entities (including banks) to contacting organisations or entities engaged in crypto transactions. Following the ban, many companies and traders in the industry ceased operations or their accounts were suspended. 

Reserve bank of India

2 years later, the situation improved as the Supreme Court lifted the RBI ban at the beginning of March this year, but it was no longer certain whether banks could serve clients related to crypto-scrapers. Apparently, some banks continue to refuse to provide their services to digital content related companies. 

Further concerns

Local attorney fintech Mohammed Danish stated that the Supreme Court ruling did not include notification by the RBI to the banks of the lifting of the ban, making the situation uncertain.

Fiat India replaced with crypto soon

Harish BV, in order to clarify the concerns of entrepreneurs, submitted a request to the financial supervisory authority in April asking whether banks are still prohibited from making their services available to companies and traders related to crypto.

In response, the RBI wrote: “as of today, such a ban does not exist”.

Cryptocurrencies available for the whole of India 

As of the date of the RBI’s response, the cryptic market had opened up to over 1.3 billion people throughout India. Most of the startups after the restrictions of 2018 registered in countries with regulations that are crypto-friendly, still operating from India, but once the RBI’s position is understood and the rules are transparent and official, the crypto and blockchain industry can grow again in India.

Future of blockchain in India
After the Supreme Court has lifted the ban, no company associated with these industries will register outside India, and their number will certainly increase dramatically in the coming years. We can expect that the development of the crypto in India will start in full swing as soon as information spreads across the country.

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