Crypto woes are increasing with all the discouraging news surrounding its trading, transaction and advertisement. This time its India’s Central Bank who has directed all the banks and financial institutions under its control to stop transactions with virtual currencies. This bank is not alone to take a move against digital currencies, Other banks like JP Morgan Chase & Co, Lloyds and Bank of America has also taken such actions previously. Indian Central Bank Bans Crypto Transactions with All its Financial Institutions.
In an unofficial statement the Representative of the Reserve Bank of India has declared that due to market instability and money laundering activities, the banks should stop providing services to the crypto traders and exchanges. The institutes which are already in connection with these exchanges are also asked to shut down the services.
Indian Central Bank Bans Crypto Transactions with All its Financial Institutions
Central Bank’s confidence in crypto authorities to develop their own financial system
The bank further reinstated that “Technological innovations, including those underlying virtual currencies, have the potential to improve the efficiency and inclusiveness of the financial system.”
This statement clearly shows that they are not against the trading of crypto currencies but only taking precautionary measures to keep the banks at a distance from any malicious activity that could possibly be performed through crypto currencies. The central banks however hopes that the crypto exchanges have the capacity to develop a financial system to make their system independent.
The reason for the the ban
The apparent reason for this ban is buying crypto currencies through debt. Huge number of traders used to buy crypto through their credit card which eventually put them and the institutions in trouble. The use of debt money to do crypto trading is more of a gamble which should be discouraged and it is one of the reasons that the Bank has moved against them.
Banks Open to Blockchain
The central bank however is open to blockchain technology since several banks in India are adopting blockchain technology initially for foreign transactions. Many industries are adopting the technology underlying crypto currencies but they are skeptical about accepting virtual currencies as a legitimate mean of transaction.
Government’s unclear stance
In last week’s statment from India’s Finance Minister, Arun Jaitely he has warned the traders and institutions to eliminate the use of virtual currencies. It further said that crypto is not a legal tender in India.
Previously, Government’s stance was different where the Minister claimed that crypto is not banned in India.
The confusion is still surrounding about the Government’s unclear stance about this future currency. They have not banned its trading but they only putting restrictions on its transaction.