Digital currency in India: Is there hope for the industry?

There have been uncertainties on the stance of the Indian government concerning digital currency. In 2018, the Reserve Bank of India (RBI) placed a ban on banks engaging in digital currency transactions or providing digital currency services, but this ban was reversed by the Supreme court in 2020.

Some banks like private bank HDFC Bank have placed restrictions on virtual currency transactions. The RBI later issued a circular that invalidated the letters sent by these banks. Earlier this year, the Indian government had intentions of proposing a bill on digital currency. The bill restricts trading, possession, issuance, mining, and transferring digital currency assets, but the bill is yet to be approved.

The Reserve Bank of India’s stance

The Reserve Bank of India still maintained its stance that digital currencies can lead the country into financial stability. Interestingly, the central bank has plans on launching its own digital currency.

Many banks and financial institutions have warned their customers against performing digital currency transactions. Several banks went as far as closing the accounts involved in digital currency transactions. Some customers even had to use Unified Payment Interfaces (UPI), an alternative method for digital currency transactions which does not involve the banks.

India’s uncertainties around digital currencies are yet to be clarified. However, a new committee maybe formed to restructure a digital currency bill. The Minister of Finance, Nirmala Sitharaman also said: “I can only give you this clue that we are not closing our minds, we are looking at ways in which experiments can happen in the digital world and cryptocurrency. There will be a very calibrated position taken.”

Nirmala Sitharaman further revealed that they plan to eliminate private digital-assets and promote blockchain technology.

Update on Net banking payment

In a recent post from Business Insider India, WazirX exchange listed some top public and private banks for online banking payment options. The banks involved are Punjab National Bank, Union Bank of India and Industrial Development Bank of India (IDBI), Deutsche Bank, and Federal Bank.

WazirX is an Indian exchange with over 7.3 million users and earned over USD 21.8 billion in trading volume in 2021.

About 10 million people in India are active investors in digital currencies, and people from different parts of the world have investments worth millions of dollars in Indian digital currency startups.

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