Indian Central Bank’s recent comments on banning crypto being the most advisable choice are clashing with the interests of the investors as well as keeping the banks in check on crypto adoption.
In Brief:
- Indian banks depend on RBI guidelines for financial services related to cryptocurrency.
- The crypto community of India disagrees with the comments made by the RBI Deputy Governor & wants the stakeholders to contribute to the solutions.
Providing financial services focusing on crypto by the banks will depend on RBI guidelines, which eventually is slowing down the crypto adoption following the recent statements by RBI officials.
Banks that are willing to provide crypto-related services, like opening bank accounts and for exchanges to have transactions are only so less in number. Most of the bank officials are not willing to comment on the further course of action due to the uncertainty of RBI’s reaction to them.
The conflicting signals by the Government of India have added to the concerns of Indian crypto investors, who were already reeling from the budget’s announcement of tax rules for digital assets.
Indian government officials have repeatedly stated that taxing cryptocurrency is not a step towards legalization, leaving banks to wait for the central bank’s approval on cryptocurrencies.
When it comes to detecting suspicious activity, exchanges are relying on banks to monitor the transactions as the exchanges do not have the means to. They expect banks to remain cautious for the time being.
“There is a risk-taking ability for the banks because if tomorrow there is something illegal then they don’t want a bad name for the bank,” said Sathvik Vishwanath, CEO of Indian crypto exchange Unocoin. “Eventually once regulations come up, cryptocurrency trading hopefully would be treated like the mutual funds and equity industry.”
On the other hand, Indian crypto investors are disappointed with the government and RBI creating fear, uncertainty, and doubt by calling crypto a Ponzi scheme. The finance minister further stated that the government and the RBI will work in “complete harmony” on crypto decisions.
