The arrival of cryptocurrencies allowed people to make money in new ways. Some became multi-billionaires, and some with an unfortunate fate lost Bitcoins worth $100 million in landfills.
However, this atypical form of money has started to see a downfall after ballooning and shocking the world last year. The unstable nature and the fact that cryptocoins are unregulated have concerned companies and governments.
Facebook and Google baned cryptocurrency related ads on their platforms, and recently Google also pulled Chrome extensions that mine crypto coins. The latest ban on cryptocurrencies comes from India’s central banking institution Reserve Bank of India.
From now on, it’s not legal for any RBI-regulated financial institutions to deal with cryptocurrencies. “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,” the bank said in a press release.
The regulated institutions including banks have to end their operations within the specified time period. A separate circular will be issued in this regard.
In the past, the bank warned people and business about the risks associated with cryptocoins and that it’s not a wise move to use it for trading. RBI said that virtual currencies “raise concerns of consumer protection, market integrity, and money laundering among others.”
But RBI has expressed interest in blockchain — the technology behind Bitcoin and other cryptocurrencies. It acknowledges that such technologies can contribute to the efficiency and inclusiveness of the financial systems.
The latest decision shouldn’t be seen as the end of cryptocoins in the nation. And it only applies to Indian financial institutions. RBI is working on a central bank digital currency, and a feasibility report will be submitted by the end of June. This strengthens the past reports suggesting that a government-backed cryptocurrency called Lakshmi coin could launch in India.
Also Read: Zuckerberg Is Still The Best Person To Run Facebook