RBI asks Banks, to not allow individuals or businesses to buy VC

Reserve Bank of India is raising concerns towards consumer interests and checking money laundering activities arising due to the presence of virtual currencies in the market. In the same regard, RBI asks banks and the financial institutions to stop providing services to the individuals and businesses dealing in virtual currencies.

RBI, after its first bi-monthly review of the monetary policy of the fiscal year 2018-19 said, Virtual Currency usually refers to crypto assets or cryptocurrency, has a huge potential to enhance the effectiveness of the financial system. On the other hand, there always hovers a concern about market integrity, money laundering and consumer protection when it comes to digital currency.

RBI earlier also cautioned the Crypto users, traders, holders and investors, a number of times in regard to associated risks of Virtual Currency. Again, concerning about the same, RBI has now decided to stop banks and other financial institutions to deal in virtual currency with its users and businesses. RBI has taken this move to safeguard the financial activities of banks, financial entities and also, to keep a curb on businesses and individuals dealing in virtual currency.

RBI will issue an official notice to all the financial institutions and banks particularly to stop virtual currency activities. Also, the central regulatory authority of Indian banks has asked to stop the running virtual currency related activities in a specified time period if any.

On the contrary, RBI is thinking to issue its own digital currency, according to BP Kanungo, the Deputy Governor of RBI. A committee has been constituted, comprising of members from different departments to study extensively the desirability and feasibility to introduce RBI’s own digital currency. The report is proposed to be submitted by the end of June month, this year. Listening to this kind of news, central banks have started debating on this Hot Topic.