If you planned on buying virtual currency bitcoin or the likes you can no more do so via banks or e-wallets etc. The Deputy Governor of the Reserve Bank of India (RBI) BP Kanungo, announced that entities regulated by RBI shall not deal with or provide services to any individuals or services dealing with or settling virtual cryptocurrencies. All the banks in the country are regulated by RBI so there can be no more virtual currency or cryptocurrency exchanges. The move was announced in its first bi-monthly monetary policy. The banks have three months to terminate their relationship with such entities within 3 months. VISA, Mastercard Make it Difficult to Buy Bitcoin
The central bank had been issuing continuous warnings about being cautious while dealing with cryptocurrencies. Especially with several scams too taking place due to the virtual nature. Given the banks around the world are improving their securities of virtual currencies, RBI seems to have taken this move. Bitcoin saw a huge surge in popularity towards the end of last year, but the unregulatory nature can facilitate many fraudulent practices. China which was once a hub of cryptocurrency trading has made them completely illegal. Japan and Korea are others who have placed a number of regulations on these virtual dealings.
Kanungo said, "If they (cryptocurrencies) grow beyond a critical size they can endanger financial stability." Although India is not completely opposing the idea of virtual currencies. A possibility of creating a new digital currency is also expressed. To quote him, "All over the world several central banks are debating the possibility of introducing a fiat digital currency as opposed to the private digital tokens like the ones I just spoke about. These are issued by the central bank that constitute the liability of the central bank and they will be in circulation in addition to the paper currency that we have. It also holds the promise of reducing the cost of printing of the note." The RBI has made an inter-departmental committee which will study the feasibility of a digital currency for India. The reports will be submitted by June-end. RBI has also issued a press release earlier in this regard stating "As such, any user, holder, investor, trader, etc. dealing with virtual currencies will be doing so at their own risk."