RBI asks banks to stop services to customers dealing in virtual currencies

RBI asks banks to stop services to customers dealing in virtual currencies

Mangalore Today News Network

New Delhi, Apr 05, 2018 : The Reserve Bank of India (RBI) on Thursday directed all regulated entities, including banks, to not provide services to businesses dealing in virtual currencies succh as bitcoin to protect consumer interest and check money laundering.

 

Technological innovations, including virtual currencies, have the potential to improve efficiency and inclusiveness of the financial system, the RBI said after its first bi-monthly monetary policy review of 2018-19, but “virtual currencies (VCs), also variously referred to as cryptocurrencies and cryptoassets, raise concerns of consumer protection, market integrity and money laundering, among others”

RBI said it has repeatedly cautioned users, holders and traders of VCs, including bitcoin, regarding the various risks associated in dealing with such digital currencies.

“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 VCs,” RBI said in a bid to ring-fence such entities.

The central bank further asked entities, which are already into such services to stop providing these kind of services within a specified time.

RBI said it will also issue a circular separately on this matter.



courtesy:HT