India’s central bank confirms cryptocurrencies aren’t banned – and says its 2018 order barring banks from crypto transactions is no longer valid

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  • India’s central bank confirmed on Monday that cryptocurrencies and exchanges are not banned.
  • A three-year-old circular that barred banks from crypto transactions is no longer valid, the RBI said.
  • “The new RBI circular clearly confirms the right to do business with crypto firms,” crypto exchange ZebPay’s co-CEO said.
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India’s central bank clarified on Monday that an old order forbidding financial institutions from supporting cryptocurrency transactions had been struck down by the country’s highest court in 2020, allowing investors to breathe a sigh of relief.

In a new note, the regulator said banks should not cite its 2018 circular as a reason to disallow trades in digital currencies as it had been “set aside by the Hon’ble Supreme Court” last year.

“The circular is no longer valid from the date of the Supreme Court judgement, and therefore cannot be cited or quoted from,” the note stated.

The latest order, addressed to all commercial and co-operative banks, followed local media reports that some financial firms, including the country’s largest banks, had advised investors against dealing in digital currencies.

“It’s amazing to see @RBI clarifying & helping solve uncertainty for crypto in India,” Nischal Shetty, founder and CEO of Indian crypto exchange founder Waz irX, said in a tweet. “There are over 1.5 crore Indians in crypto. This news has brought joy and confidence to everyone in the sector.”

Read More: A senior crypto trader at a $500 million digital asset manager shares his favorite trading strategies to generate ‘riskless profits’ – and the 3 sectors of the nascent market that he is most bullish on

Still, the RBI order directs institutions to continue to perform due diligence processes before providing services.

“This is positive news for the entire crypto industry – businesses, stakeholders, and investors,” Avinash Shekhar, co-CEO of crypto exchange ZebPay, told Insider. “Investing in crypto has always been 100% legal in India and the new RBI circular clearly confirms the right to do business with crypto firms.”

He added that the RBI’s communication about due diligence is a welcome move that could strengthen the relationship with banking and payment gateway partners, and make crypto investments accessible to more Indian investors.

The crypto industry in India still awaits further direction from the government in the form of a new law that reportedly address criminal possession, issuance, and crypto mining.

Bitcoin was little changed on Tuesday, trading 1% higher around $36,196. The digital token is up 25% so far this year.

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The SEC’s ‘crypto mom’ says it would be foolish for the US government to ban bitcoin since people can’t be stopped from trading in it

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Bitcoin advert on a London bus during the third lockdown of the coronavirus pandemic.

  • The SEC’s “crypto mom” Hester Peirce said it would be foolish for the US government to ban bitcoin.
  • It’s hard to stop people from trading digital assets even if the government restricts efforts, she said.
  • Peirce is optimistic that the SEC’s new chairman will make a key difference to crypto ETF approval.
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SEC commissioner Hester Peirce said at a virtual event on Wednesday that the possibility of a bitcoin ban has passed and governmental attempts to do so would be pointless.

“I don’t see how you could ban it,” she said at an “Investing in Crypto” event hosted by MarketWatch. “A government could say it’s not allowed here, but people would still be able to do it,” she added, saying it would be hard to stop anyone from trading in digital assets. “So I think it would be a foolish thing for the government to try to do that.”

Peirce, who hopes 2021 will mark a turning point for crypto regulation, said she wasn’t sure whether a bitcoin exchange-traded fund would be approved just yet since the SEC is in a period of transition. She won the nickname “crypto mom” in 2018 after disagreeing with the SEC’s decision to reject a bitcoin ETF application by the Winklevoss twins.

Regulatory veteran Gary Gensler’s nomination for SEC chairman was approved by the Senate Banking Committee last month. His confirmation will make a big difference to whether a crypto ETF gets approved, Peirce said.

Peirce thinks the US is behind the curve in regulating digital assets in comparison to other countries. But she’s optimistic about Gensler’s knowledge of crypto, and expects to have productive conversations about the space with other regulators soon enough.

“Our approach has been much more of a ‘say no and tell people to wait’ approach, so we need to turn that around, be willing to work to build a framework that is appropriate for this industry,” she said.

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