India’s central bank bans cryptocurrency dealings for all financial companies

While the Bitcoin and almost every other cryptocurrency are already seeing a huge dip, another major blow comes as the Reserve Bank of India, the country’s central bank has banned cryptocurrency trading nationwide, with the release of its first monetary policy for the financial year.

Regulated financial institutions in India can no longer legally deal with cryptocurrencies as announced by the Reserve Bank of India, reports Bloomberg. The financial firms will no longer be able to provide services to any individual or business that is buying or selling digital currencies – that includes private banks and digital wallet providers. All regulated banks have three months to comply with the directive.

According to the bank’s statements,

“In view of the associated risks, it has been decided that, with immediate effect, entities regulated by RBI shall not deal with or provide services to any individual or business entities dealing with or settling [virtual currencies]. Thousands of Indians who may have quit their jobs because they have been earning well as crypto traders now have nowhere to go. They’ll be left without jobs, without a source of income.”

This is a huge blow to cryptocurrency enthusiasts and traders in the country, which is said to account for 1 in every 10 Bitcoin transactions worldwide. However, the bank claims the digital assets also raised flags over consumer protection, market integrity, and money laundering.

The Reserve Bank of India was more open to the blockchain, the technology that underpins virtual currencies, which it said has the potential to improve the efficiency and inclusiveness of the financial system.