Cryptocurrency

In India, Banks Shy Away From Crypto Use

The crypto landscape in India, at least when it comes to banking, may be a bit less indecisive.

Turns out the private sector seems to be taking at least some measures into its own hands.

As reported by ccn.com, some Indian banks are inking service agreements that require customers to pledge that they will not use cryptocurrencies for, well, just about anything — stipulations that are baked into new service agreements.

The measures to discourage crypto use come in the wake of a directive earlier this year from the Reserve Bank of India that states that banks cannot provide services to cryptocurrency businesses.

Welcome to a stark choice, as noted by the site, between banking and cryptocurrencies. Choose banking, the traditional kind, and the full-fledged embrace of cryptos may be hobbled. The seemingly ad hoc measures by the banks mandate that users will “not deal with any transactions related to Crypto-currency including Bitcoins,” and the bank reserves the right to close accounts should customers waver from those terms.

Noted ccn.com: Warnings are displayed on ATM screens, stating that “virtual currencies (VCs) are not legal tender and do not have any regulatory permission or protection in India. We request you not to make transactions involving any VCs from any of your account/s. For any such transactions, the bank shall be acting in accordance with the regulatory guidelines which include closing your account without further intimation.”

As reported early in 2018, the central bank has stated that security and volatility issues tied to cryptos were at issue — and though technically in India there is no outright ban on cryptos, bit by bit, and seemingly unofficially, their use, or at least outright use, is being truncated.

As noted in this space last week, India’s government began the new year stating that cryptocurrencies are still being eyed with “due caution” and that it has no “clear recommendations” on their use. There also will not be a state-backed cryptocurrency in the offing.

As reported in Quartz and other media outlets, the government has said that there remains an “absence of a globally acceptable solution and the need to devise a technically feasible solution” … and it all warrants “further study.”

In other actions related to India’s (non) embrace of cryptocurrencies, the police in the Indian state of Jammu and Kashmir have stated that there is “heightened risk” for the public when it comes to investing in cryptocurrencies. There could be a sudden crash, and a prolonged one, the inspector general of the state has warned, and as quoted by the Business Standard.

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