‘Freedom!’ Indian Crypto Startups Say as RBI Removes Banking Barriers for Them

Tue, 05/26/2020 - 09:12
Yuri Molchan
After a long crypto ban in India and a legal battle between crypto entrepreneurs and the RBI, the latter has given in and promised to allow startups to get back to work
Cover image via stock.adobe.com

After a crypto ban was laid on crypto exchanges and other cryptocurrency startups in India, the Reserve Bank of India (RBI) continued to oppose crypto entrepreneurs and traders in court and forbade banks from working with crypto companies.

However, in March, the RBI was forced to withdraw its requirement to banks under the pressure of the court.

Now, a local news outlet reports that the RBI has officially promised to make no hindrances for running crypto-related businesses.

No prohibition on banks for working with crypto companies

In March 2018, the RBI forbade local banks from providing accounts to crypto exchanges and other crypto-related companies.

That draconian measure brought about a wave of resentment from crypto traders and entrepreneurs, since the majority of the victims were exchanges. Some of them attempted to switch to P2P trading while others had to shut down and stop their business.

Now, this seems to be over.

Indian news outlet inc42 reports that the RBI has confirmed the removal of the crypto ban from banks and, therefore, crypto companies in India. The official response from the RBI goes:

“As on date, no such prohibition exists.”

The inquiry was made by a co-founder of the Unocoin exchange, BV Harish.

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Certain issues remained until now

Despite the removal of the crypto ban, the inc42 article says the status of crypto assets in India remains unclear – whether they are to be categorized as commodities, currencies, goods or something else.

For this reason, numerous local startups have failed in getting back to work and capitalizing under the new favourable conditions.

Until the recent confirmation from the RBI, many banks were not able to provide crypto companies with accounts, requiring a new official RBI circular to include this information. 

Now, the issue seems to be resolved.

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About the author

Yuri is a journalist interested in technology and technical innovations. He has been in crypto since 2017. Believes that blockchain and cryptocurrencies have a potential to transform the world in the future. ‘Hodls’ cryptocurrencies. Has written for several crypto media. Currently is a news writer at U.Today, can be contacted at yuri.molchan@u.today.

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