The cryptocurrency exchanges in India are ready to abide by strict regulations. In a recent statement, released by the cryptocurrency exchanges, they clearly stated that they were ready for greater scrutiny by RBI.
According to a statement by RBI on April 5, 2018, it has directed all the banks to ban the account of cryptocurrency exchanges. It has also strictly asked the banks to have no relationship with the cryptocurrency exchanges. As a result, it is becoming difficult for the cryptocurrency exchanges to conduct normal business.
Owing to this very reason, many of the cryptocurrency exchanges have actually shut down their operation. The few which are still running have tried to circumvent the ruling by operating from other countries. Moreover, there is also a Supreme Court hearing which is scheduled on July 20. It will decide whether cryptocurrency exchanges can be provided banking facilities or whether the cryptocurrency exchanges will be shut down.
In the last hearing, the Supreme Court clearly stated that the matter is between the cryptocurrency exchanges and RBI. As a result, the responsibility is on the cryptocurrency exchanges to communicate with RBI. Also, last week, plenty of cryptocurrency exchanges actually sent out a letter to the RBI.
Regulate instead of Banning
According to the statements in the letters, it was clearly stated that banning them will be counter-productive. Instead, RBI should regulate them better so that they are able to abide by the local rules and regulations. Moreover, they clearly stated that they can satisfy and change according to the concerns of the Central bank.
Also, many of the Bitcoin exchanges have requested RBI to remove the blanket ban. They have stated that only the cryptocurrency exchanges which are not able to abide by the rules and regulations should be banned.
There are quite a few cryptocurrency exchanges which abide by the KYC and AML rules and regulations. However, RBI has also banned them from accessing the banking facilities as well. Most of the cryptocurrency exchanges in India are seeking information from the users while activating their accounts. As a result, anonymous accounts are not present in any of the cryptocurrency exchanges.
It remains to be seen whether RBI relents or whether it is firm on its previous decision. For now, however, it is becoming more and more difficult for the cryptocurrency exchanges to operate in the country. With the limited banking facilities, they are not able to process the transactions as smoothly as they were able to earlier.