RBI Notification On Cryptocurrency: Banks Cannot Stop Users From Investing In Crypto

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Over the past couple of months, many SBI and HDFC bank customers received warning emails from their respective banks that dealing with cryptocurrencies was illegal and that the customers’ accounts would be terminated if they continued dealing in cryptocurrencies, as many users had reported on Twitter. However, yesterday, on May 31, the Reserve Bank of India put out an official statement clarifying that banks were using the old 2018 circular from the RBI to warn their customers and it was not applicable since the Supreme Court legalised cryptocurrencies in March 2020. Read on to know more about RBI’s new notification about banks and cryptocurrency in India. 

RBI Notification on Cryptocurrency 

RBI released the notification regarding banks dealing with cryptocurrencies where they announced that it had come to RBI’s attention that banks and financial institutions were warning their customers against using cryptocurrencies based on RBI’s ban on cryptocurrencies back in 2018. The notification also mentioned that the ban has since been lifted by the Supreme Court on March 4, 2020, and banks cannot legally warn or threaten their customers for using cryptocurrencies. 

As you can see from the tweet above the RBI has clearly stated that banks cannot stop their customers from investing in cryptocurrencies. This is big news for crypto exchanges and crypto investors in India, as the Indian crypto community had been eagerly waiting for clarification by the RBI/Supreme Court on the legality of cryptocurrencies in India. This new step by the RBI is a step in the right direction for the crypto community, and crypto enthusiasts took to Twitter yesterday with the #IndiaWantsCrypto. 

For the past few banks, banks had also started to refuse services to cryptocurrency exchanges, citing that they were an investment risk. According to an article by Mint, the RBI had unofficially informed banks to stop their dealings with companies involved in cryptocurrencies. Now that the RBI has clarified its stand on the issue, users and exchanges could very well see their payment processes restored. Stay tuned for more updates on cryptocurrencies in India. 

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