A new official notice published by the Reserve Bank of India (RBI) has positively impacted crypto enthusiasts in India as the central bank pointed out that a previous circular preventing banks from making business with crypto industries is no longer valid.
The notice was addressed to all commercials and cooperative banks, payment banks, small finance banks, and other financial institutions on Monday 31st as a result of media reports about certain entities cautioning customers against virtual currencies based on a previous circular.
The RBI circular referred by the notice was originally published on April 06 of 2018 and was titled “Prohibition on dealing in Virtual Currencies (VCs)”. It prohibited all entities regulated by the reserve bank from dealing with or providing services involving any form of virtual currencies.
This forced any entity that was providing such services to stop during the following 3 months.
The circular, which had been cited by some of the country’s biggest banks when cautioning users about Virtual currencies, was later overturned by India’s Supreme Court in 2020. T
he RBI told financial institutions that as a result of the supreme court’s decision, the circular is not only valid but also can’t be cited or quoted from.
The RBI also noted that regulated financial institutions were still able to carry out customer due to diligence processes based on governing standards.
These standards cover Know Your Customer (KYC), Anti-Money Laundering (AML), Combating of Financing of Terrorism (CFT), and obligations of regulated entities under Prevention of Money Laundering Act.
RBI Move Floods Indian Crypto Industry With New Optimism
Despite the increasing uncertainty around the future of the cryptocurrency industry in the world’s 5th largest economy, the news was received with optimism by crypto leaders in the country.
Sumit Gupta, Co-founder, and CEO at CoinDCX, referred to the news by tweeting:
“This is great news directly coming from RBI. RBI…