Over the course of the past half-decade or so, the cryptocurrency space has grown at a breakneck pace, and it is believed that it is going to keep expanding in the years to come. However, in this regard, it is also important to note that it has thrived because many nations have not outlawed crypto tokens.
In this regard, India, one of the world’s biggest economies, cleared the air about its stance on cryptocurrencies. The central bank of the country, the Reserve Bank of India, stated that despite reports to the contrary, cryptocurrencies are not banned in the country.
The RBI stated that it has not technically banned cryptocurrencies but instead created ring-fence regulations by way of which the country’s banks and other financial entities are protected from risks related to these assets. The Indian central bank has also asked the banks in the country not to deal with cryptocurrencies. On top of that, cryptocurrency exchanges in India have also been starved of regular banking support, and that has seen the closure of some exchanges in recent times.
The latest announcement from the RBI will, however, come as a boost for the sector. After all, the central bank has clearly stated that cryptocurrencies are not banned in India.
In a statement, the RBI said, “The RBI has been able to ring-fence the entities regulated by it from being involved in activities that pose reputational and financial risks along with other legal and operational risks.” The development, however, is also an indication that the situation is probably going to continue to be tough for cryptocurrency exchanges that are looking for access to banks.
>> Libra Still Faces Uphill Battle Despite Softened Swiss Stance
More importantly, crypto traders are also barred from using their bank accounts to fund their accounts with fiat currency or withdraw fiat. However, the fact that cryptocurrencies are not actually banned in India should come as a glimmer of hope.
Featured image: DepositPhotos © artjazz