Bitcoin trading in India has declined by as much as 90% owing to the strict regulations imposed by Indian banks. A few days ago some banks in India even sent notifications to their customers stating that their credit/debit cards cannot be used for purchasing bitcoins or other cryptocurrencies. Moreover, these banks have also shut down the trading accounts of various bitcoin exchanges in the country.
Major Indian banks including SBI, HDFC Bank, ICICI Bank, Kotak Mahindra, etc. have all shut down the trading accounts of various bitcoin exchanges. Moreover, certain banks like Citibank and HDFC have also sent a notification to their customers stating that the credit and debit cards issued by them can no longer be used for purchasing any kind of cryptocurrencies. These tight regulations imposed by the banks have significantly affected bitcoin trading across the country.
The government of India had issued warnings about cryptocurrencies multiple times in the past. In a statement issued in December 2017, the Reserve Bank of India compared the bitcoin bubble to a Ponzi scheme. It also warned investors that they might lose their money in such unfamiliar investments.
The cryptocurrency boom witnessed last year made people from different parts of the world invest in various cryptocurrencies. However, the price fluctuation and regulatory warnings from various governments have made it an unsafe bet in the currency market.
Most cryptocurrencies including bitcoins have dedicated followers in different parts of the world. However, most of those who invest money in cryptocurrencies do not have an in-depth understanding of blockchain technology or how this virtual currency works. The main reason for the bitcoin bubble witnessed a few months back was due to the speculative investment of traders who wanted to make quick money.
Bitcoin is currently trading at a price higher than $8,000. However, it went as high as $20,000 a few months ago fueled by speculations from around the world. On a global level, many international banks including JP Morgan, Citigroup, etc. have banned the use of their credit cards for buying cryptocurrencies due to fear of defaults by their customers.
BankBazaar urges its readers to take extreme caution before trading, mining or investing in virtual currencies. BankBazaar does not endorse cryptocurrencies or making investments in cryptocurrencies in any manner. Our only goal is to provide information to our visitors about cryptocurrencies. We advise our readers to consider investing in Mutual Funds, Fixed Deposit, ULIPs and other legally recognised investment avenues rather than risking their capital on extremely volatile and unregulated assets like cryptocurrencies.
The Reserve Bank of India (RBI) issued a Press Release on December 24, 2013, cautioning users, holders and traders of virtual currencies including Bitcoins regarding the potential economic, financial, operational, legal, customer protection and security related risks associated in dealing with virtual currencies. RBI has also clarified vide press release dated February 1, 2017 that it has not given any licence/authorisation to any entity/company to operate such schemes or deal with Bitcoin or any VC.
The Ministry of Finance issued a statement on December 29, 2017 stating that virtual currencies are not legal tender. Mr. Arun Jaitley in his budget speech on February 1, 2018 has clearly stated that the Government does not consider crypto-currencies legal tender or coin.
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