{"id":51065,"date":"2021-06-08T13:41:40","date_gmt":"2021-06-08T13:41:40","guid":{"rendered":"https:\/\/timestampmag.com\/?p=51065"},"modified":"2021-06-09T13:55:04","modified_gmt":"2021-06-09T13:55:04","slug":"central-bank-rbi-issues-official-notice-as-indian-banks-caution-against-crypto","status":"publish","type":"post","link":"https:\/\/timestampmag.com\/2021\/06\/08\/central-bank-rbi-issues-official-notice-as-indian-banks-caution-against-crypto\/","title":{"rendered":"Central Bank RBI Issues Official Notice as Indian Banks Caution Against Crypto"},"content":{"rendered":"<ul>\n<li>RBI cautioned other major banks in bringing a quashed 3 year old circular to the fore in discussing the topic of cryptocurrency usage<\/li>\n<li>Other banks are encouraged to carry out customers due to diligence processes revolving around AML and KYC standard protocols, under the PMLA of 2002<\/li>\n<li>The crypto market is huge in India with over 1.5 crore cryptocurrency users contributing to more than $2 billion to the country\u2019s economy.<\/li>\n<\/ul>\n<p>In a state where banks like HDFC and the State Bank of India have cautioned their customers against using cryptocurrencies like <a href=\"https:\/\/timestampmag.com\/the-bitcoin-philosophy\/\" target=\"_blank\" rel=\"noopener\">Bitcoin<\/a> (BTC) and Ether (ETH), the Reserve Bank of India has made a key announcement.<\/p>\n<p>The <a href=\"https:\/\/rbi.org.in\/Scripts\/NotificationUser.aspx?Id=12103&amp;Mode=0\" target=\"_blank\" rel=\"noopener\">official statement<\/a> mentions that the RBI, India\u2019s Central Bank, has taken notice of multiple media reports on certain banks warning their respective customers against <a href=\"https:\/\/timestampmag.com\/2020\/04\/03\/the-crypto-philosophy\/\" target=\"_blank\" rel=\"noopener\">cryptocurrency<\/a> usage, by placing a three-year-old quashed circular by RBI at the fore.<\/p>\n<p>\u201cSuch references to the above circular by banks\/regulated entities are not in order as this circular was set aside by the Hon\u2019ble Supreme Court on March 24, 2020, in the matter of Writ Petition,\u201d the latest RBI notice states. With this announcement, the RBI has reinforced that the circular being cited by these nationalized and private banks is no longer valid and does not hold.<\/p>\n<p>At the same time, the RBI has also made it clear that banks and other regulated financial institutions are allowed to carry out customer due to diligence processes revolving around Anti-Money Laundering and Know Your Customer (KYC) standard protocols, under the Prevention of Money Laundering Act (PMLA) of 2002.<\/p>\n<h2>What have the Banks Said?<\/h2>\n<p>Some of India\u2019s largest nationalized and private Indian banks, such as the State Bank of India and the HDFC, have recently cautioned their customers against trading in digital currencies such as BTC. A group of users has reported on <a href=\"https:\/\/twitter.com\/RegaFlick\/status\/1400409652332941315?s=20\" target=\"_blank\" rel=\"noopener\">Twitter<\/a> and other platforms that the HDFC Bank had cited the RBI\u2019s 2018 order which banned cryptocurrency usage in India. However, the order was officially annulled in March 2020 by the Supreme Court of India.<\/p>\n<p>The banks had been actively advising customers not to invest in crypto assets besides withdrawing payment support for Indian crypto exchanges and trading platforms. Several leaders in the Indian crypto sphere, including Nischal Shetty, CEO of <a href=\"https:\/\/wazirx.com\/\" target=\"_blank\" rel=\"noopener\">WazirX<\/a>, one of the most recognized crypto trading platforms in the country, view such arbitrary bans and withdrawals as a major drawback in the Indian crypto sphere.<\/p>\n<h2>What does the RBI\u2019s Circular Mean?<\/h2>\n<p>The comments by RBI come at a time when there is widespread uncertainty in India and the world regarding the future and use cases of cryptocurrencies. The <a href=\"https:\/\/timestampmag.com\/2020\/05\/27\/crypto-developments-during-coronavirus\/\" target=\"_blank\" rel=\"noopener\">digital currencies<\/a> have seen unprecedented spurge in use and popularity in the country, with over 1.5 crore crypto users contributing more than $2 billion to the country\u2019s economy.<\/p>\n<figure id=\"attachment_51067\" aria-describedby=\"caption-attachment-51067\" style=\"width: 1707px\" class=\"wp-caption alignleft\"><img fetchpriority=\"high\" decoding=\"async\" class=\"size-full wp-image-51067\" src=\"https:\/\/timestampmag.com\/wp-content\/uploads\/2021\/06\/pexels-alesia-kozik-6781340-scaled.jpg\" alt=\"\" width=\"1707\" height=\"2560\" srcset=\"https:\/\/timestampmag.com\/wp-content\/uploads\/2021\/06\/pexels-alesia-kozik-6781340-scaled.jpg 1707w, https:\/\/timestampmag.com\/wp-content\/uploads\/2021\/06\/pexels-alesia-kozik-6781340-200x300.jpg 200w, https:\/\/timestampmag.com\/wp-content\/uploads\/2021\/06\/pexels-alesia-kozik-6781340-683x1024.jpg 683w, https:\/\/timestampmag.com\/wp-content\/uploads\/2021\/06\/pexels-alesia-kozik-6781340-768x1152.jpg 768w, https:\/\/timestampmag.com\/wp-content\/uploads\/2021\/06\/pexels-alesia-kozik-6781340-1024x1536.jpg 1024w, https:\/\/timestampmag.com\/wp-content\/uploads\/2021\/06\/pexels-alesia-kozik-6781340-1366x2048.jpg 1366w\" sizes=\"(max-width: 1707px) 100vw, 1707px\" \/><figcaption id=\"caption-attachment-51067\" class=\"wp-caption-text\">Source: <a href=\"https:\/\/www.pexels.com\/photo\/luck-business-money-finance-6781340\/\" target=\"_blank\" rel=\"noopener\">Pexels.com<\/a><\/figcaption><\/figure>\n<p>After the publication of the RBI circular, the Indian crypto market saw a <a href=\"https:\/\/timestampmag.com\/major-crypto-investment-trends\/\" target=\"_blank\" rel=\"noopener\">sudden rise<\/a>, adding confidence in the users\u2019 stride. Several crypto investors and start-ups have welcomed the RBI\u2019s move, citing that the notice is the first step toward ending uncertainties around crypto investments and activities in India.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>RBI cautioned other major banks in bringing a quashed 3 year old circular to the fore in discussing the topic of cryptocurrency usage Other banks are encouraged to carry out customers due to diligence processes revolving around AML and KYC standard protocols, under the PMLA of 2002 The crypto market is huge in India with [&hellip;]<\/p>\n","protected":false},"author":13,"featured_media":51066,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[6],"tags":[30,101,370,137,103,251,612,613,616,617,615,614,618],"_links":{"self":[{"href":"https:\/\/timestampmag.com\/wp-json\/wp\/v2\/posts\/51065"}],"collection":[{"href":"https:\/\/timestampmag.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/timestampmag.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/timestampmag.com\/wp-json\/wp\/v2\/users\/13"}],"replies":[{"embeddable":true,"href":"https:\/\/timestampmag.com\/wp-json\/wp\/v2\/comments?post=51065"}],"version-history":[{"count":3,"href":"https:\/\/timestampmag.com\/wp-json\/wp\/v2\/posts\/51065\/revisions"}],"predecessor-version":[{"id":51071,"href":"https:\/\/timestampmag.com\/wp-json\/wp\/v2\/posts\/51065\/revisions\/51071"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/timestampmag.com\/wp-json\/wp\/v2\/media\/51066"}],"wp:attachment":[{"href":"https:\/\/timestampmag.com\/wp-json\/wp\/v2\/media?parent=51065"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/timestampmag.com\/wp-json\/wp\/v2\/categories?post=51065"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/timestampmag.com\/wp-json\/wp\/v2\/tags?post=51065"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}