Indian Central Bank Asks Banks to Cut Ties with Crypto Exchanges

The Reserve Bank of India is taking a different approach to curb the growing cryptocurrency industry in the country. According to Reuters, the central bank is informally asking regulated banks to cut ties with crypto exchanges.

“The regulator has been unofficially asking us that why are we dealing in such business when it is ultra speculative. A lot of money flows overseas via this trade which the RBI is not comfortable with as it may lead to money laundering,” an anonymous senior bank executive told the publication.

Though official numbers are still a mystery, India is believed to have 10 million cryptocurrency investors with more than $1.36 billion in investments. These numbers are going up quickly with the recent rally in digital currency prices.

Additionally, the rise of Cryptocurrencies Cryptocurrencies By using cryptography, virtual currencies, known as cryptocurrencies, are nearly counterfeit-proof digital currencies that are built on blockchain technology. Comprised of decentralized networks, blockchain technology is not overseen by a central authority.Therefore, cryptocurrencies function in a decentralized nature which theoretically makes them immune to government interference. The term, cryptocurrency derives from the origin of the encryption techniques that are employed to secure the netw By using cryptography, virtual currencies, known as cryptocurrencies, are nearly counterfeit-proof digital currencies that are built on blockchain technology. Comprised of decentralized networks, blockchain technology is not overseen by a central authority.Therefore, cryptocurrencies function in a decentralized nature which theoretically makes them immune to government interference. The term, cryptocurrency derives from the origin of the encryption techniques that are employed to secure the netw Read this Term has become a concern for the Indian central bank and the government as well. The Indian government is expected to ban cryptocurrencies with a new law, but the harsh Covid situation in the country has suspended those efforts.

The RBI is now informally moving against crypto despite the country’s apex court favored the Indian crypto exchanges to quash a previous ban of banking services for crypto exchanges imposed by the regulator.

“Even though the discussions are informal that is enough. No one wants to go against the regulator,” another source told Reuters.

Banks Turning Their Backs on Crypto

The approach seems to be very effective as several top lenders are taking a proactive approach to block crypto-related transactions. ICICI, one of the top Indian private lenders, is urging payment service companies to stop crypto-related transactions. Other major banks like Axis Bank, Citibank, and Kotak Mahindra Bank also took a negative stance against cryptocurrencies.

“Axis Bank has taken a fairly negative stance against crypto. They are citing internal policy and risk measures and have stopped transactions with crypto exchanges,” the Chief Executive of a global crypto Exchange Exchange An exchange is known as a marketplace that supports the trading of derivatives, commodities, securities, and other financial instruments.Generally, an exchange is accessible through a digital platform or sometimes at a tangible address where investors organize to perform trading. Among the chief responsibilities of an exchange would be to uphold honest and fair-trading practices. These are instrumental in making sure that the distribution of supported security rates on that exchange are effectiv An exchange is known as a marketplace that supports the trading of derivatives, commodities, securities, and other financial instruments.Generally, an exchange is accessible through a digital platform or sometimes at a tangible address where investors organize to perform trading. Among the chief responsibilities of an exchange would be to uphold honest and fair-trading practices. These are instrumental in making sure that the distribution of supported security rates on that exchange are effectiv Read this Term with operations in India said.