RBI Governor Lists concerns on Cryptocurrency Trade

Recently the Reserve Bank of India has been in the news after issuing clarification against the use of their 2018 circular related to the ban on cryptocurrency trade practices. The Supreme Court of India had stroked out this decision in 2020, and the banks in India were still using it as an excuse to scare their customers away from the cryptocurrency trade by sending out notices to them warning cancellation and freezing their accounts.

Shaktikanta Das, the RBI governor, has addressed his concerns on the functioning of the cryptocurrency trade network in such a densely populated country with more than 1.5 crore active traders and 15,000 crores worth of investments. He continued to address his concern and shared that they have conveyed all of the major issues and problems with the smooth functioning of cryptocurrency trade to the government. 

The order has been struck down by the Supreme Court, and the banking and financial institutions have been told to carry out due diligence on the transactions related to cryptocurrency. There is a major concern on the terrorism funded by untraceable cryptocurrency transactions, as there have been many proofs related to funding linked to terrorist group’s social media campaigns a while back. Not only this, another major issue that has been brought up by RBI is money laundering. The unregulated and untraceable transactions of the cryptocurrency market pose as a very viable option for the corrupt people spread throughout the globe looking to wire money from one place to another. 

People are being advised against using the cryptocurrency market extensively as it has proven to be a highly volatile market with constant fluctuations in price. It can prove to be a very expensive trade if you are new to the trade; starts investing large chunks of money idolizing billionaires and tier-one investors who made fortune trading. The trade requires a lot of patience and understanding of the market to turn the investments into long-term profits. Recently, after the banks started to bottleneck the transactions by blocking out payment gateways for cryptocurrency-related activities amid the absence of a regulatory and direct order to follow, investors spread across the country were furious as their investments were turning into losses as per the market trend and they could not even cash out their trade. There is a sigh of relaxation among the traders and investors after RBI came forward and directed the banks to follow due diligence and start supporting cryptocurrencies until the plea to ban cryptocurrencies completely is not granted by The Supreme Court.