The repercussion of the crypto's final clamp down will befall some 5 million Indian investors as well as crypto exchanges in the country. While, the policy statement has put an immediate ban on fresh investment in virtual currencies, existing investors have been given 3 months time to decide the course of their investment bet. In India, bitcoin investments are estimated close to $2 billion.
After issuing repeated warning on virtual currency trading and investment related activities including bitcoins, the RBI as part of its bi-monthly monetary policy review on April 5, 2018 has asked all of the regulated entities to cut-off and not provide any services to individuals or businesses dealing in VCs or settling them. While the statement is directed at banks, the brunt will be borne by the investor class.
So, as an investor in virtual currencies including bitcoin you have two options:
Before discussing the available options, it is to be noted here that you already are at a disadvantage as you cannot take up your bitcoin related grievance for redressal as it is an unregulated avenue and not watched over by any of the authorities.
1. Redeem your investment in bitcoin or other VCs: As the current ecosystem around virtual currency trading is likely to shut down in due course, it shall be wise for investors to exit their positions and get the proceeds transferred back to their account within the stipulated timeline of three months given by the RBI. Nonetheless, the ease of redemption would depend on your crypto-exchange. It may also be the case that seeing the huge sell-off activity, exchanges set withdrawal limit for a daily and weekly basis.
2. Investors willing to remain put in VCs can transfer bitcoin holdings to foreign exchange: If you have the penchant for these tokens despite the huge risk and have a long term trading perspective you can divest your holdings in them to a foreign exchange such as Coinbase etc. But when doing so keep in view the international remittance and FEMA regulations.