The Reserve Bank of India has confirmed that crypto traders, companies and exchanges are allowed to open bank accounts
The Reserve Bank of India (RBI) has confirmed there is no banking ban on the cryptocurrency sector, responding to a Right to Information (RTI) request.
The RTI was filed on April 25 by BV Harish, co-founder of Unocoin, one of India’s leading cryptocurrency exchanges.
Harish asked whether the RBI had prevented any bank in the country from providing bank accounts to crypto traders, companies or exchanges.
On May 22, the RBI replied that “as of now, such a ban does not exist.”
In March, after several hearings, the Supreme Court of India struck down the RBI circular issued in April 2018 that had prevented banks from offering services to individuals or businesses involved in cryptocurrencies. That ruling restored INR support for many cryptocurrency exchanges.
Despite the court decision, reports indicated that some banks continued to refuse to open accounts for crypto exchanges, claiming they were awaiting further instructions from the RBI.
“Bankers said they needed new RBI circulars, claiming there are no longer restrictions on them providing bank accounts for cryptocurrencies,” Harish said.
“Now, we have received a positive response from the RBI.”
The removal of banking restrictions has coincided with a substantial rise in trading volumes and new user signups. While economists had warned that the nationwide lockdown could trigger one of the worst recessions in India, the cryptocurrency sector has expanded. Peer-to-peer markets are thriving, new exchanges are being established, and fresh investments are flowing into the space.
The Supreme Court’s decision was widely welcomed on social media, with many users celebrating under hashtags such as #IndiaWantsCrypto and viewing the ruling as a win for the industry. Nischal Shetty, CEO of the Indian exchange WazirX, called the judgment an opportunity for India to participate in the blockchain revolution.
“Today is a historic day for the entire Indian crypto ecosystem. This positive judgment will open the doors to massive crypto adoption in India. It shows that we can now innovate and the entire country can participate in the blockchain revolution,” Shetty said.
“I am confident this judgment will have a positive impact on the global crypto ecosystem. It will lead to more crypto startups in India. Hundreds of startups will be created. VC investment will flow into the sector and this will create more jobs,” he added.
The Indian government is still deliberating on a regulatory framework for cryptocurrencies; however, progress has largely been delayed due to the pandemic and the nationwide lockdown.