Bitcoin, blockchain, and cryptocurrencies, in general, are becoming more popular in India. The central bank's statement came as a relief to all Indian investors and crypto exchanges who have invested in cryptocurrencies.
The Reserve Bank of India (RBI) confirmed today that banks and other businesses cannot cite its 2018 order on virtual currencies because it was overturned by the Supreme Court of India in 2020.
Since its inception in 2009, Bitcoin has had a tumultuous trading history.
Bitcoin, Ethereum, Dogecoin, Shiba Inu are some of the popular cryptocurrencies.
According to letters received by the lenders, HDFC Bank and State Bank of India (SBI) previously warned their customers against dealing in virtual currencies such as bitcoin.
What is Virtual Currency?
Virtual currency, often known as virtual money, is an uncontrolled digital currency that is created and controlled by its creators and utilized and accepted by members of a virtual community. The whole superset that contains virtual currency, which in turn includes cryptocurrencies, is known as a digital currency.
The Central Bank further added, "Banks, as well as other entities addressed above, may, however, continue to carry out customer due diligence processes in line with regulations governing standards for Know Your Customer (KYC), Anti-Money Laundering (AML), Combating of Financing of Terrorism (CFT) and obligations of regulated entities under Prevention of Money Laundering Act, (PMLA), 2002 in addition to ensuring compliance with relevant provisions under Foreign Exchange Management Act (FEMA) for overseas remittances."
Indian investors have been progressively exhibiting interest in supporting the cryptocurrency markets, particularly bitcoin, as they recognize the potential of the developing business. While short-term traders seeking quick profits account for a minor portion of the sales volume, the trend is mostly driven by long-term investors who have recognized the potential of the cryptocurrency and intend to hold it for years, if not decades, to reap maximum rewards.