India’s largest private sector bank and lender has decided to break ties with cryptocurrency trades amid confusing directions by the Supreme Court and The Reserve Bank of India. On Thursday, ICICI told some network gateway operators to shut their net banking servers for trades directly or indirectly related to the selling of Bitcoins. The cryptocurrency or virtual currency, as many like to call it, lacks government backing and does not have legal backing in any financial system.
Money launderers, terrorists, and many criminals find cryptocurrency to be a great alternative to banking as it offers anonymity and it is virtually impossible to trace. In recent times, there has been a lot of speculation involving cryptocurrency and its uses in various aspects of society. Many have linked these virtual currencies to illegal trades, and that it is used to fund terrorist groups across the world. Cryptocurrency has us to the point of uncertainty and unpredictability to financial institutions across the globe. It plays a major role in terror financing, and it has been going on since the introduction of various cryptocurrencies. There have been many reports that state the usage of cryptocurrency for terrorist groups funding to run their social media campaigns.
India is a hotspot for such activities when compared to the Middle East and Africa, as there is poor internet infrastructure that demotivates the terrorist groups from moving towards bitcoin usage. Whereas, India has far better infrastructure regarding the connectivity and speed. There is just ample Information Technology infrastructure to support these activities. In addition to these factors, the legal infrastructure to control the use of bitcoins in crimes has not been developed until now.
The Reserve Bank of India (RBI) and Supreme Court are moving slowly towards regulating the use of cryptocurrency and limiting the trade of Bitcoins and Ethereum to a certain extent, which in turn has resulted in the biggest private lender banking institution revoking their gateway processes related to any form of cryptocurrency. As the situation progresses and the confusion among the financial institutions is settled, Indian citizens might see some relaxation in these gateway blocks and may be able to trade their virtual currencies without any hassle. However, since the decision was taken suddenly amid the lack of clarity, it might take a while before the situation goes back to normal, and limiting the trade of cryptocurrencies might bring about some positive changes in the future.