Against the accepted journalistic prerogative, even a “common” understanding of how cryptocurrencies work is enough to realize that no entity, government or person could ever “ban” cryptocurrency. There could only be a ban on exchanges that facilitate trading cryptocurrencies which might limit options of trading through the digital/easier methods.
As analysts say, if it ever happens then it would give rise to huge volumes in OTC (over the counter) trading and might create a “black money” complication which might be the exact reason governments want to curb crypto trading.
RBI released a statement through Chief General Manager Jose Kattoora a few days back and stated that banks that are regulated by the RBI should exit any sort of partnerships with any business or person(s) that are dealing with cryptocurrencies. There is a separate elaborate notice that will be sent to the banks soon regarding the same.
After RBI released the statement, Unocoin one of the cryptocurrency exchange platforms in India released a statement.
Sathvik, the CEO and Co-Founder of Unocoin says that banks that are already working with cryptocurrency companies are given a duration of 3 months to cease all support. He adds that the banks they are currently associated with have not issued any notice and if they do, they will definitely communicate with all their customers.
According to the press release, the CEO claims that all the funds, be it in INR, BTC or any other virtual currencies are safe and users can continue to use the platform like before and can even withdraw if they want to.
The platform says that as per the RBI notice, the legality of cryptocurrencies still remains unchanged as the notice doesn’t talk about its legal status but was more in the line of the risks associated with cryptos.
Zebpay, another leading cryptocurrency platform has also made a press release about the RBI notice and says they will continue to provide services and all the customers’ funds are secure in the platform but the sudden disruption in the banking facilities could affect the ability to service deposits and withdrawals. The official website adds that they do not guarantee any returns.
Karen Teoh, COO of Kommerce.com says,
“I’ve heard that several exchanges are planning a constitutional law challenge against RBI. Cryptocurrency trading is not illegal, ergo denying service for legal activities is illegal and a restraint of economic rights.”
Marek Flinsinski, a Twitterati says,
“The change is in legal status of transferring money from bank to e-wallet – ban that makes a problem to cryptos.”
Saurabh Gupta, a blockchain and cryptocurrency enthusiast says,
“This would lead to peer-to-peer otc exchanges.”
Arun Jaitley had earlier in a budget speech made a statement that states that all cryptocurrencies including Bitcoin are not to be considered as legal tenders.
There is already a huge movement underway with several players from the blockchain, exchanges and the crypto space reaching out to the government to make them realize the importance of cryptocurrencies and some arguing their fundamental economic rights are being violated with the current statement from RBI. A petition supporting this agenda is already up on change.org and within a matter of few days has already received 16600 supporters at press time.
Raymond Lalmuana, a person who signed this petition says,
“I’m signing because I do not think the RBI, the institution that could not detect the Nirav Modi’s scam for years, has the right to tell me how I can spend my hard earned money. In one fell swoop, RBI has wiped out the dreams and aspirations of lakhs of ordinary Indians and caused irreparable damage and loss.”
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