RBI Clarifies: No Ban On Banks To Provide Services To Crypto Businesses

India’s central bank RBI Clarifies that there is no prohibition on the banks in the country to provide banking to crypto-related businesses. The clarification came right after the right to information query was filed by Unocoin’s co-founder BV Harish so let’s find out more in our cryptocurrency news today.

The RBI had previously set a blanket ban on cryptocurrencies by stopping the banks from serving crypto-related businesses. This caused a lot of confusion on the market and most of the newcomers believed that this blanket norm made cryptocurrency illegal in India which was not the case.  In March 2020, the ban was lifted once the Supreme court stepped in and passed a judgement saying that the RBI has no right to deny banking services to the crypto industry.

An RTI was filed by @bvharish Co-founder of Unocoin.

Question: Does RBI prohibited any banks from providing the bank accounts to crypto exchanges or crypto traders ?

Answer from RBI: As on date no such prohibition exist.

Great, now you can show this RTI to your bank. 🚀🚀 pic.twitter.com/n5iqGCSQtd

— KoinX (@getkoinx) May 24, 2020

After the court decision, the local exchanges in India decided to start providing banking services to their crypto clients. However, because of the sudden spike of crypto businesses and the ongoing coronavirus pandemic, the banks again denied banking to crypto businesses even after the Supreme court judgement. Now, the RBI clarifies that the banks can start providing services again to crypto businesses:

 “Bankers have been saying that they need new RBI circulars mentioning that there are no more restrictions for them to provide bank accounts for crypto businesses. Now, we have received a positive response from the RBI”

The Reserve Bank of India says that it has only restricted some regulated financial establishments from having to deal with anyone that uses digital currencies as we reported in the previous bitcoin news. Also, Indian Bitcoin lobby which derives from the major tech lobby NASSCOM tried to force the Reserve Bank of India to accept cryptocurrencies like bitcoin in its regulatory sandbox. The goal is to improve the future of cryptocurrencies in the country and to make it more accessible to the crypto users in the country.

India is the world’s second most populated country and right now, it is increasingly embracing cryptocurrencies amid the domestic economic issues as well as the coronavirus-related lockdown. India also sees a spike in crypto trading now and every trader is looking to take advantage of the time window offered by the Supreme Court’s ruling.