Reserve Bank of India banned digital currencies like Bitcoin, Ethereum from offering services to any individual or business dealt with cryptocurrencies.
The central bank has provided three months to the regulated entities like banks and finance firms to unravel their entities related to cryptocurrencies as stated by RBI Governor BP Kanungo in a Media Conference.
RBI was in the process to endorse the utilization of Blockchain as a public ledger which serves as the backbone of Bitcoin. The blockchain technology helps in financial services for enhancing transparency and improving accession.
The Central Bank’s action comes after three warnings to the public at large for being judicious while trading with digital currencies. This step came forward after the governments of different countries are scrutinizing the use of cryptocurrencies due to the unregulated nature. The agile raise the price of bitcoin in the year 2017 has become the popular cryptocurrency. This provokes concerns that virtual currencies could facilitate everything from laundering finance to evading tax and theft.
As we know early in the month of December $20,000 a series of curbs have pulled down bitcoin and rival cryptocurrencies. The losses are escalated since the beginning of the year 2018. One of the Global hubs for digital currencies, China also banned trading of cryptocurrency. Other countries like Japan and South Korea have also put certain regulations on the trade of cryptocurrencies.
Arun Jaitley, Finance Minister of India asserted that Indian Government doesn’t consider cryptocurrencies as legal cash and will eradicate the use of Cryptocurrencies.
RBI has said that “India isn’t giving up on the idea of a virtual currency completely. In line with central banks around the globe, the RBI too is mulling introducing a fiat digital currency. These are issued by the central bank and are considered the liability of the central bank”.
Further Kanungo added that they will be in circulation in addition to the paper currency that we have. It also holds the promise of reducing the cost of printing notes.
This move will have the great impact on the people who invested in Cryptocurrencies in India. RBI has taken a steady step to demonetize digital currencies. Vishal Gupta, Co-founder of Digital Assets and Blockchain Foundation of India told that “effectively means people lose the ability to conduct any trade or exchange, at least in the open market”.
Image Source:- Cryptocurrencies