Тhe Reserve Bank of India has posted a statement with the intent of giving clarification regarding the crypto trading situation in the country. Amid heated debate it appears that digital currencies are not banned in the country, but banking support on their trading is.
The local news outlet Economic Times reported that the clarification was made by the Indian central bank to the supreme court in an affidavit submitted on September 4.
According to the affidavit, “Firstly, the RBI has not prohibited VCs (virtual currencies) in the country. The RBI has directed the entities regulated by it to not provide services to those persons or entities dealing in or settling VCs. The RBI has been able to ringfence the entities regulated by it from being involved in activities that pose reputational and financial risks along with other legal and operational risks.”
The central bank has mainly highlighted the substantial risk of money laundering and terror financing that crypto trading poses behind its reasoning to restrict banking services connected with digital currencies. It also pointed out the risk involved in the volatile nature of the crypto prices itself.
At the same time multiple petitions from crypto exchanges have been submitted to the Indian apex court against the order of the RBI on crypto.