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‘Freedom!’ Indian Crypto Startups Say as RBI Removes Banking Barriers for Them


u.today 27 May 2020 01:00, UTC
Reading time: ~2 m

After the loud case of the crypto ban laid on crypto exchanges and other cryptocurrency startups in India, the Reserve Bank of India (RBI) continued to oppose crypto entrepreneurs and traders in court.

In March, the RBI was forced to withdraw its requirement to banks under the pressure of court.

Now, a local news outlet reports that RBI has officially promised to make no hindrances for running crypto-related businesses.

No prohibition on banks for working with crypto companies

Back in March 2018, the RBI forbade local banks from providing accounts to crypto exchanges and other crypto-related companies.

That draconian measure brought up a wave of resentment from crypto traders and entrepreneurs, since the majority of the victims were exchanges. Some of them attempted to switch to P2P trading and some had to shut down and get out of business.

Now, this seems to be over.

Indian news outlet inc42 reports that the RBI has confirmed the removal of the crypto ban from banks and, therefore, crypto companies in India. The official response from the RBI goes:

“As on date, no such prohibition exists.”

The enquiry was made by a co-founder of the Unocoin exchange, BV Harish.

Certain issues remained until now

Despite the removal of the crypto ban, the inc42 article says the status of crypto assets in India remains unclear – whether they are to be categorized as commodities, currencies or goods, etc.

For this reason, numerous local startups have so far failed to get back to work and capitalize under the new favourable conditions.

Until the recent confirmation from the RBI, many banks did not provide crypto companies with accounts, requiring a new official RBI circular mentioning that.

Now, the problem seems to be solved.

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