India's central bank confirms cryptocurrencies aren't banned, says its 2018 order no longer valid
- India's central bank confirmed on Monday that cryptocurrencies and exchanges are not banned.
- A three-year-old circular that barred banks from crypto transactions is no longer valid, the RBI said.
- "The new RBI circular clearly confirms the right to do business with crypto firms," crypto exchange ZebPay's co-CEO said.
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India's central bank clarified on Monday that an old order forbidding financial institutions from supporting cryptocurrency transactions had been struck down by the country's highest court in 2020, allowing investors to breathe a sigh of relief.
"The circular is no longer valid from the date of the Supreme Court judgment, and therefore cannot be cited or quoted from," the note stated.
The latest order, addressed to all commercial and co-operative banks, followed local media reports that some financial firms, including the country's largest banks, had advised investors against dealing in digital currencies.
"It's amazing to see @RBI clarifying & helping solve uncertainty for crypto in India," Nischal Shetty, founder and CEO of Indian crypto exchange founder Waz irX, said in a tweet. "There are over 1.5 crore Indians in crypto. This news has brought joy and confidence to everyone in the sector."
Still, the RBI order directs institutions to continue to perform due diligence processes before providing services.
"This is positive news for the entire crypto industry - businesses, stakeholders, and investors," Avinash Shekhar, co-CEO of crypto exchange ZebPay, told Insider. "Investing in crypto has always been 100% legal in India and the new RBI circular clearly confirms the right to do business with crypto firms."
He added that the RBI's communication about due diligence is a welcome move that could strengthen the relationship with banking and payment gateway partners, and make crypto investments accessible to more Indian investors.
The crypto industry in India still awaits further direction from the government in the form of a new law that reportedly address criminal possession, issuance, and crypto mining.
Bitcoin was little changed on Tuesday, trading 1% higher around $36,196. The digital token is up 25% so far this year.
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