The Reserve Bank of India (RBI) has cleared the air on cryptocurrencies by stating that its 2018 circular is not valid. The circular came after several leading banks sent notices to their customers warning them of account suspension if they continue to deal in crypto transactions. So, will banks still continue their ambivalent stance towards crypto investors? Money9 spoke to Nischal Shetty, founder and CEO, WazirX, to know what this latest development means for domestic investors.
“I spoke with many bankers after the RBI circular. They all said that it is very positive and has brought clarity about crypto trading. I think we will get clarity in 3-5 days on how banks are looking at the circular and in what direction things will go. But it is clear that RBI has said no to quote the 2018 circular. We have to wait and see how banks will react,” he told Money9.
Shetty said this time, they are talking to every bank and do not want to depend on one banking partner.
“We will choose at least 2-3 banking partners so that deposit and withdrawals do not get affected due to one banking partner,” he said.
So, how much time could it take for banks to resume services?
“Banks might take 1-2 weeks to process this as they also have to discuss this internally. It can also be just 2-3 days but very difficult to state a particular time-frame,” he said.
On April 6, 2018, RBI directed that all entities regulated by it shall not deal in virtual currencies or provide services for facilitating in dealing with or settling the cryptocurrencies. Hence, all the banks that were already providing such services were told to exit the relationship within three months with the cryptocurrency trading platforms.
The Supreme Court on March 4 last year set aside the RBI circular, which was issued on April 6, 2018, lifting curbs on cryptocurrency trading in India. After the Supreme Court order, several exchanges started offering crypto services again and in no time it emerged as a popular alternative investment avenue.
“The year 2021 has been very positive in terms of regulation. A new committee has been formed where crypto will be seen as an asset. India has already embarked on the regulation road. It might take some time but we think and hope that some guidelines come into place, if not regulations,” Shetty added.
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