Monday
April 9
2018

Reserve Bank of India bars banks from links to cryptocurrencies like bitcoin

By Alekh Archana

The Reserve Bank of India (RBI) on Thursday stipulated that its regulated entities such as banks and non-banking financial companies (NBFCs) must have no links to firms or individuals dealing with or settling cryptocurrencies like bitcoin. The directive comes into effect immediately.

“Digital tokens issued by private parties are getting international attention for quite some time for their speculative value. Internationally, while the regulatory responses to these tokens are not uniform, it is universally felt that they can seriously undermine the anti-money laundering/FATF (Financial Action Task Force) framework, adversely impact market integrity and capital control. And if they grow beyond a size they can endanger financial stability as well,” said B.P. Kanungo, deputy governor of the RBI.

RBI said that a circular in this regard will be issued.

Those entities that already have relationships with such vendors must unwind them within three months, Kanungo added.

 

Photo courtesy of Pixabay.

Source: Livemint (link opens in a new window)

Tags
banking, bitcoin, cryptocurrency, financial services, India, regulations