RBI bars banks from dealing with virtual currencies

RBI bars banks from dealing with virtual currencies

What has happened?

The Reserve Bank of India (RBI) has asked banks to stop providing service to any entity dealing with virtual currencies, with immediate effect.

Three-month deadline

• Regulated entities that are already providing such services should exit the relationship within three months.
• After advising all stakeholders about the risks of virtual currencies, the central bank had decided to ring-fence the RBI regulated entities from the risk of dealing with entities associated with virtual currencies

New digital currency

RBI will explore introducing digital currency and had formed an interdepartmental group to study and provide guidance on the desirability and feasibility to introduce a central bank digital currency. The report will be submitted by end-June 2018.