RBI asks banks to block bank accounts of cryptocurrency exchanges

By Jayadeep Reddy

Posted on April 6, 2018

RBI continues the effort to ban cryptocurrency in India. In the latest move, RBI asked banks to stop the banking operations of any known cryptocurrency exchanges or traders operating out of India. This comes while the draft bill to legalise the ban on cryptocurrency trading is pending approval.

Over the last few months, many payment gateways stopped services to cryptocurrency exchanges. This made cryptocurrencies exchanges to ask customers to directly deposit money into their bank accounts and post verification the required bitcoins were allowed to be purchased. This leads to increased transaction times and discourages many users to trade bitcoins. Now With RBI asking banks to stop baking operations for these entities, it will become technically impossible for cryptocurrency exchange to operate.

RBI gave three months time for banks to do the same, In a statement BP Kanungo, RBI Deputy Governor said  “If they (cryptocurrencies) grow beyond a critical size they can endanger financial stability”

It will be very difficult for people holding bitcoins to sell them and making the exit impossible and also leading to huge monetary losses.

Zebpay and Unocoin are some top bitcoin trading platforms in India and it is estimated that over a 1 Billion USD exchange of cryptocurrency happens in India. Research states that over the last few months there is a steady decline of crypto trading in India. There were numerous scams and Ponzi schemes happening around ICO and Cryptocurrencies. Recently Pune police unearthed largest crypto scam in India and arrested several people including the founders Amit Bhardwaj, 35, and his brother, Vivek, 31. They created a crypto Ponzi scheme in the pyramid style and lured many HNI’s to invest in them. Police are yet to determine the veracity of the scam.

At a global level bitcoin is facing tough sanctions and regulations. Bitcoin dropped from its year-end high of 20000$ to 6000$. At the time of writing this post, bitcoin is trading at 6700 USD.

If you are holding any bitcoins consolidate now or you may never get a chance to do the same.

RBI asks banks to block bank accounts of cryptocurrency exchanges