Reserve Bank of India With Important Clarifications on Crypto Regulations

The Reserve Bank of India issued a new circular today, clarifying that although banks and other entities need to carry customer due diligence, cryptocurrencies are not outlawed in the country.

• Citing media reports that banks and regulated entities have “cautioned their customers against dealing in virtual currencies by making a reference” to a circular that RBI Issued back in 2018, the bank now clarifies the situation.
• The institution said that these “references are not in order as this circular was set aside by the Hon’ble Supreme Court on March 04, 2020.”
• In other words, institutions can no longer quote this circular when advising clients against dealing with cryptocurrencies.
• CryptoPotato reported earlier in May that the Indian government is purportedly considering regulating the market instead of flat-out banning Bitcoin.
• With this in mind, it appears that the most recent circular is in continuation of this stance.
• However, it’s also worth noting that the new release says that “banks, as well as other entities…, may, however, continue to carry out customer due diligence processes in line with regulations governing standards for KYC, AML, CFT…”

Official notification from @RBI about Crypto. #IndiaWantsCrypto https://t.co/vAdp6jcFBc pic.twitter.com/OKw8aJcoDL

— Nischal (WazirX) ⚡️ (@NischalShetty) May 31, 2021