The Reserve Bank of India (RBI) has completely withdrawn the banking facilities to the cryptocurrency exchanges. As a result, most of the cryptocurrency exchanges are not able to operate in the country. Recently, the reserve bank of India told the Supreme Court that they are regulating the cryptocurrency markets to avoid any kind of illegal transactions. They believe in extreme caution in order to avoid the illegal transactions. This is one of the main reasons why they are regulating this space.
Disappointment for Cryptocurrency Exchanges
Senior Counsel Shyam Diwan represented the Reserve Bank of India. He also told that the RBI had set up a committee in order to look at the various issues pertaining to cryptocurrencies. He further stated that it will take the bank at least three weeks in order to find the conclusions of that committee and look into the conclusions. Also, he stated that the central bank will be able to respond to the various petitions only after a period of three weeks. For now, however, the order will not be lifted.
Many of the cryptocurrency exchanges are actually disappointed by this. They had hoped that the Supreme Court, will take appropriate actions and lift the ban. Since they are not able to access the banking facilities, most of them are not able to run their day to day business as well. As a result, they are not able to open new accounts as well. This is one of the main reasons why they are not able to operate at all.
However, according to the RBI, they are actually protecting the consumers from any kind of fraud. Moreover, they want to ensure that the consumers accidentally do not participate in any kind of money laundering activities as well. This is another reason why they are restricting the cryptocurrency activities.
It remains to be seen whether in the future, there is any scope for the cryptocurrency exchanges or not. Up until now, it seems like the RBI will not allow banking facilities to the cryptocurrency exchanges anytime soon. If indeed, it allows so in the future, the cryptocurrency exchanges will be able to accept new investors as well. This will mean that Indian citizens will also be able to invest in cryptocurrency exchanges if RBI allows the exchanges to access the banking facilities like any other industry.