MUMBAI Reuters Indias central bank is informally urging lenders to cut ties with cryptocurrency exchanges and traders as the highly speculative market booms, despite a Supreme Court ruling that banks can work with the industry, three sources told Reuters
The guidance comes as India is crafting a law to ban cryptocurrencies and penalize anyone dealing in them, which would be among the most sweeping crackdowns on the new investing fad in the world. But with the COVID19 crisis engulfing the country, no one is sure when such a bill may be passed, adding to investors confusion.
The Reserve Bank of India RBI in 2018 had forbidden banks from dealing in all transactions related to bitcoin and other such assets. That diktat was challenged by the crypto exchanges and in March 2020, Indias top court overturned the RBI ban and allowed lenders to extend banking facilities to them.
With investors continuing to rush into the hot new asset class, however, regulators appear to be gearing up for another try.
Thousands of new users are piling into the system every day at a time when the prices of major digital currencies have been on the rise. There are over 10 million crypto investors in India with total holdings of over 100 billion rupees 1.36 billion, according to industry estimates. No official data is available.
The regulator has been unofficially asking us that why are we dealing in such business when it is ultra speculative. A lot of money flows overseas via this trade which…