Category Archives: Central Bank of India

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Over 17,000 Sign Petition Against India’s Crypto Ban

A petition supporting blockchain has gained 17,000 signatures since India Central Bank’s announced it was to terminate business with crypto-related accounts on 5 April.

Starting on the same day the Central Bank made its statement, the impetus behind the petition has been driven mainly by younger users who are employed in the industry, citing youth unemployment as a major concern.

The petition notes that blockchain technology is here to stay and that any prohibition of business activities reduces India’s competitiveness in the market risking the country being “left behind”.

Leaders from within the industry have been voicing their own particular concerns about the ban since the petition. Nischal Shetty, CEO of crypto exchange WazirX, sent a direct tweet to the Reserve Bank of India asking it to “think progressively” and “reconsider” its decision.

US, Japan, South Korea go towards regulating Cryptos so that their country progresses while RBI decides to block Indians from getting involved in the crypto revolution. We need to think progressively, @RBI please reconsider this and let’s take a positive step forward 🙏🏻

— Nischal (WazirX) (@NischalShetty) April 5, 2018

As one of the fastest growing economies in the world, India needs to remain competitive by providing new technologies with skilled labour. The blockchain and cryptocurrency sphere is one such area employing many young people.

India has one of the highest youth populations in the world; current estimates indicate a high of 356 million youth. By 2020, 500 million Indian citizens are expected to be under the age of 25.

India’s recent financial growth has not trickled down to benefit the sheer volume of young people who are out work. A lack of skilled manpower is one of the reasons behind such large numbers of unemployed youth and new technologies provide opportunities for new skills to be developed. Since its introduction, blockchain technology has created tens of thousands of jobs for young Indians.

The economic factor is also a concern to many. Recently, tech investor Tim Draper voiced his concerns with the Central Bank’s announcement, suggesting that this “mistake” could cause a tech drain.He believed this scenario to be likely following any total ban of cryptocurrency in India due to other emerging players around the world needing the technological expertise to develop their own industry portfolios.

Pakistan’s State Bank was quick to follow India last week with a statement confirming that financial companies would be barred from working with cryptocurrency firms in the country.


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India Prohibits Banks From Handling Crypto

The Reserve Bank of India (RBI) announced in a press release Thursday that all banks and regulated financial entities would now be strictly prohibited from facilitating transactions involving cryptocurrencies.

”Cryptocurrencies comes with associated risks”

Press release details note that the decision was made because of what is described as ”associated risks” of cryptocurrencies. The ban on dealings or settlings in digital currency is effective immediately, impacting all entities under the regulation of the RBI.

The singular exception to the rule are regulated entities that already provide financial transfers to cryptocurrency wallets or exchange platforms. RBI deputy governor BP Kanungo announced on Thursday at a press briefing that such service providers will be given a provisional three months to cut ties with such clients.

Kanungo went on to discuss the possibility of the Central Bank of India launching what he refers to as ”fiat digital currency” with the liability of the bank. He noted that this would be an environmentally-friendly option, as it could reduce the amount of paper used as opposed to traditional currency. The viability report for this is scheduled to be available in June 2018.

Blockchain technology, however, is an initiative that Kanungo supports. He said in the same briefing that blockchain developments should be encouraged and exploited.

Cryptocurrency in India

Bitcoin, in particular, has suffered past criticism from banking authorities. The central bank has repeatedly issued warnings to cryptocurrency investors over the potential volatility of the market. HDFC and Citi Bank have both restricted clients from purchasing Bitcoin via their debit and credit cards.

Despite the prohibition on banks handling digital currency assets, government officials in India recently reiterated the law requiring cryptocurrency investors to pay taxes on their holdings. In December 2017, the income tax authorities of India issued tens of thousands of tax notices to investors following surveys conducted of the country’s nine largest cryptocurrency exchanges.

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