The Reserve Bank of India (RBI), the country’s apex bank, has publicly clarified its position on cryptocurrency in the country. According to the RBI, it did not outrightly ban the use of digital currencies for Indian citizens.
It is known that the RBI is somewhat averse to crypto and has recommended restrictions and a possible ban. In 2018, the RBI asked banks and payment companies to stop crypto transactions. In response, the Internet and Mobile Association of India (IAMAI) filed a complaint with the Supreme Court.
After deliberations, the Supreme Court ordered the RBI to respond to the IAMAI filing. As part of its response, the RBI says a restriction was placed for risk control, but not a total ban.
“Firstly, the RBI has not prohibited VCs (virtual currencies) in the country. The RBI has directed the entities regulated by it to not provide services to those persons or entities dealing in or settling VCs…The RBI has been able to ringfence the entities regulated by it from being involved in activities that pose reputational and financial risks along with other legal and operational risks.”
This development is a big relief for many crypto proponents who have been unsure about the state of digital currencies in the country.
Last year, the crypto restriction in India prevented authorities from accessing over $1 million worth of Bitcoin as part of an investigation into a Ponzi scheme.
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