The Indian cryptocurrency market was left shocked on Thursday when Reserve Bank of India (RBI) announced a major crackdown on cryptocurrencies across the nation. In its announcement, RBI said banks and all other entities regulated by RBI cannot provide services to users, holders and traders of cryptocurrencies. The announcement sent the market into free fall as Bitcoin tumbled from Rs.4.6 lakhs to 3.5 lakhs per coin. Along with Bitcoin, every other major cryptocurrency dropped by over 27% within 3 hours. Moreover, in the same announcement, in very subtle words, RBI revealed its plan to create its own digital currency. RBI bans crypto-trading through banks in India.
The RBI’s notification triggered panic-selling among Bitcoin traders. As is the case with all major announcements, rumours began circulating in the Indian crypto-market that RBI has banned cryptocurrencies with immediate effect.
However, it is not the case. The notification from RBI only eliminates the banks and other institutions regulated by RBI from cryptocurrency trading. In simple words, banks will no longer provide any service to you if you try to buy/sell/trade in cryptocurrency. The government’s stance on cryptocurrency remains same as cryptocurrencies are still unregulated in India (as said by Mr Arun Jaitely during the budget presentation in February). RBI has given banks a duration of 90 days (3 months) for the execution of its proposal. So for next 90 days, your bank will provide assistance in buying/selling/trading of cryptocurrencies but not after 90 days.
Bitcoins and all other cryptocurrencies continue to be unregulated, meaning you can still trade in cryptocurrencies but no Indian bank will support the transaction. You can buy/sell/trade in cryptocurrencies through cash, or the banks which are not controlled by RBI (banks which operate outside India).
Analysts around the world see the decision of RBI with a raised eye. The fact that RBI announced its decision not to support any cryptocurrency and also, in the same announcement, revealed its plan to launch its own digital currency did not go well with everyone.
The RBI Digital Currency
RBI said a panel would submit a report by June on the practicality of introducing a virtual currency which will be backed by the Indian government. Currently, RBI is reviewing the advantages of digital currency over banknotes. The digital currency, for one, will allow RBI to spend considerably less for printing and releasing bank notes. It will also result in improved and efficient transaction. However, it is widely accepted that the digital currency of RBI, if introduced, will not replace banknotes. The Indian digital currency will be an addition to paper currency.
All cryptocurrency trading exchanges, without any exception, across the nation, are currently planning a new strategy to serve its customer and BuyBitcoin remains firm on its ‘Customer First’ policy.
As promised, BuyBitcoin will continue to serve its customers in the best possible way according to the situation.
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