RBI forbids Indian Banks from dealing with Cryptocurrencies

BP Kanungo, the Deputy Governor of the Reserve Bank of India (RBI) just announced that entities regulated by RBI shall not deal with or provide services to any individuals or services dealing with or settling virtual cryptocurrencies. All Banks are regulated by the RBI and hence, they will not be allowed to provide their services to Cryptocurrency exchanges.

At this point, it is too early to call it a complete ban on Cryptocurrencies in India. We need to wait for further confirmation on this, since it was not discussed in detail. He also said existing entities should terminate their relationships within 3 months.

He spoke in favour of Blockchain but not Cryptocurrencies because it is not possible for them to regulate it.

Towards the end, he also mentioned that an inter-departmental committee has been formed to explore the feasibility and the desirability for a virtual currency issued and backed by the government.