In an important development concerning the crypto space in the country, the Reserve Bank of India (RBI) has cautioned banks in the country not to quote its circular of 2018 to warn their customers against trading cryptocurrencies. This is because the circular issued in 2018 by India’s Central Bank was subsequently quashed by the Supreme Court of the country in 2020. If the banks in the country continue to rely on the quashed circular, it could create legal implications for RBI, and hence, it has come up with an official communique in this regard.
Shortly after the communication of RBI, many cryptocurrency platforms and enthusiasts welcomed the move. They urged banks in the country to allow their account holders/investors to trade in digital coins. The Chief Executive Officer and Co-Founder of the leading cryptocurrency exchange in India CoinDCX, Sumit Gupta, said that they are pleased with the clarification of the stand from RBI. As a result, now there should not be any confusion about the status of cryptocurrency trading in the country. Gupta also said that they also respect the concerns of stakeholders of the Banking and Finance industry and agencies involved in the formation of policies regarding anti-money laundering practices. This is why they think that should be a joint discussion on this topic where concerns/suggestions of all stakeholders involved in the domain should be discussed, deliberated, and mulled upon to find an optimal solution to the issue.
The Chief Executive Officer of Coinswitch Kuber, Ashish Singhal, emphasized that it is high time for banks and financial institutions to allow cryptocurrency traders to have their accounts with them. This will enable the country to remain at the forefront of digital technology adoption, which will be a mainstay of the future.
Although RBI has clarified its position on the quashed notice, it must not be considered an endorsement for Digital coins from the country’s Central Bank. Instead, this clarification has only come to save the central bank from any future legal complications. It is important to know that both India and China have refrained from adopting digital currencies as these countries are wary of the negative effect digital coins could have on their fiat currencies and hence economies.