The Reserve Bank of India has said that Crypto is not banned in India, such as Bitcoin in India. But the only ringfenced regulated entities like banks from risks associated with the trading of such virtual instruments.
RBI had filed a copy of the 30-page affidavit in SupremeCourt on September 4.
“Firstly, the RBI has not prohibited VCs (virtual currencies) in the country. The RBI has directed the entities regulated by it. And not to provide services to those persons or entities dealing in or settling VCs. The RBI has able to ringfence the entities regulated by it. Even involved in activities that pose reputational and financial risks along with other legal and operational risks.” the affidavit said.
The risks highlighted by the central bank. That included terror financing and money laundering through cryptocurrencies.
Crypto is not banned in India
“Any possible avenues which facilitate anonymous cross-border fund. The transfer has to act upon swiftly and stringently dealt with. It admitted fact that VCs have used to purchase illegal and illicit goods ranging from guns and ammunition to drugs.” the RBI said in its affidavit. In response to IAMAI’s objections.
Even the central bank also suggested the Foreign Exchange Management Act. And its regulations enhanced to prevent and track remittances. The remittances are mainly for investment in virtual currencies. And those made under the Liberalised Remittance Scheme. The RBI’s Liberalised Remittance Scheme allows individuals to send $250,000 a year abroad.
The central bank was not against technological innovation. Moreover, it also encouraged the “development and adoption of distributed ledger technology, also called as blockchain technology.”
Source: Economic Times