[ad_1]
IDFC First Bank has temporarily halted services to crypto companies as it explores “increased diligence.” IDFC First Bank is not alone, as ICICI Bank, Yes Bank and Paytm Payments Bank have made similar decisions since May. Cryptocurrencies were banned by the Reserve Bank of India (RBI) in 2018, but India’s highest court overturned the decision in 2020. For banks, cryptocurrencies are a concern as they are often a preferred instrument. for money laundering, illegal purchases and smuggling-related transactions. Many Indian banks are reluctant to serve the crypto industry and have chosen to take matters into their own hands even though there is no official ban in place. The latest institution to join the movement is IDFC First Bank. It halted services to crypto companies in the past week, sources told Livemint.
The report claims the move is temporary as the bank explores “increased diligence” regarding bank support for crypto exchanges.
IDFC First Bank is not alone in keeping its distance from volatile markets. ICICI Bank, Yes Bank and Paytm Payments Bank have taken similar decisions since May. Big wigs HDFC Bank and State Bank of India (SBI) have also warned their users about the risks of dealing with unregulated digital currencies like Bitcoin.
Such measures add further confusion for customers who are caught in the middle. Bank decisions are internal without transparency or direct communication that alerts users to change.
There is no official cryptocurrency ban in India, and the RBI has confirmed it
Publicity
Last month, the RBI clarified that banks and other regulated entities should not cite its April 2018 order banning banks from engaging with virtual currencies.
The directive is no longer true as it was overturned by the Supreme Court of India in 2020. Since then, the crypto industry has gone absolutely unregulated, making it difficult for regulated financial players to decide of the final result.
For banks, cryptocurrencies are a concern as they are often a preferred instrument for money laundering, illegal purchases and smuggling related transactions. While the RBI clarification has relieved crypto investors, banks are caught in the middle as they cannot fully support the crypto or claim absolute immunity from its future fallout or problems.
Self-regulation is the only short-term solution for exchanges As the Indian government considers whether or not to pass new laws to deal with cryptocurrencies, crypto exchanges have agreed to self-regulate under patronage. of the Internet and Mobile Association of India (IAMAI). It includes a code of conduct that will see all members of the crypto exchange voluntarily comply with KYC, tax and other standards.
The crypto exchanges have also reportedly set up a second lobby – of which Zebpay is a confirmed member – under the leadership of IndiaTech, an industry body representing the country’s leading internet startups like Ola, MakeMyTrip, Nykaa, Dream11, and more.
With formal setup, the board and exchanges will develop protocols to accommodate regular audits and inspections, client recourse mechanism, and fraud protection. The collective effort, they claim, will also help crypto exchanges monitor money laundering, illegal transactions, etc.
India is estimated to have 15 million crypto investors with 10,000 crore of digital assets. For an industry that has no regulations, that’s a lot of money at stake.
Even though cryptocurrencies are a concern, the underlying blockchain technology is welcome. Recently, 15 private and public banks have partnered in India to form a new group called Indian Banks’ Blockchain Infrastructure Company Private Limited (IBBIC). Initially, they plan to process Letters of Credit (LC), GST invoices, and electronic invoices through the blockchain to help speed up the existing system.
For a more in-depth discussion, head over to Business Insider Cryptosphere – a forum where users can delve into all things crypto, engage in interesting discussions, and stay ahead of the curve.
SEE ALSO: Here’s how China’s 2021 crackdown on crypto differs from the 2017 ban There are several reasons Zomato wants an $ 8 billion valuation from its IPO – here’s if that makes sense
[ad_2]
picture credit