RBI regulated entities will have to discontinue dealing in virtual cryptocurrencies, which includes Bitcoins, and stop providing services to any person or company dealing with digital money till 5th of July.
“Such services include maintaining accounts, registering, trading, settling, clearing, giving loans against virtual tokens, accepting them as collateral, opening accounts of exchanges dealing with them and transfer/receipt of money in accounts relating to purchase/sale of VCs,” RBI official said in a report on Friday.
In a bid to ring-fence regulated entities, on Thursday after the monetary policy announcement, RBI said, “In view of the associated risks, it has been decided that, with immediate effect, entities regulated by the Reserve Bank shall not deal in VCs or provide services for facilitating any person or entity in dealing with or settling VCs.” The central bank released this on 5th of April stating, “Regulated entities which already provide such services shall exit the relationship within three months from the date of this circular.”
In a move to regulate the cryptocurrency market in India, Finance Minister of India Arun Jaitley clarified in his Budget speech that it is not legal tender and the government will discourage its use. However, he had also mentioned that the government would look at the utilization of cryptocurrency technology in India.
Globally, there has been a move to clamp down on trading of virtual currencies, with some of the developed countries such as South Korea banning anonymous trade in such type of cryptocurrencies.
There have certain concerns over the safety measures of investors’ accounts as on several occasions accounts of investors have been hacked by criminal elements who have fled with investor wealth.