Money & Banking

Crypto users see the light at the end of the tunnel

Surabhi Mumbai | Updated on October 20, 2021

There has been some easing in the stance by banks towards crypto transactions in the last three to four months

Banking troubles for crypto enthusiasts and investors in the country seem to have abated to some extent with at least a handful of banks permitting such transactions.

According to cryptocurrency exchange owners, there has been some easing in the stance by banks towards crypto transactions in the last three to four months. Smaller private sector banks as well as a few public sector banks are understood to be now permitting these transactions.

“Till three to four months ago, there were problems but the situation in terms of banking is now under control. All options are fully functional and one can do INR deposits through bank accounts,” said Sumit Gupta, co-founder and CEO, CoinDCX.

Also see: Millennials pull crypto out of the shadows

In an interaction with BusinessLine, he said that members of CoinDCX are not facing any banking related problems.

“Banks also have a reasonable understanding of cryptocurrency now. The progress on bank front is very encouraging. Smaller banks are opening up to crypto to get a larger market share,” Gupta said.

Relaxed positions

Another crypto exchange owner said that the position varies from bank to bank but it has significantly relaxed from the blanket ban towards cryptocurrency transactions that was seen earlier in the year.

Also see: Bitcoin hovers near 6-month high on ETF hopes, inflation worries

“It is not as if the industry doesn’t have any problem with banks. In most cases users are not facing the kind of problems they had earlier when they wanted to transact for crypto investments,” he said, adding that banks are no longer blocking accounts of crypto investors or warning of action.

Payment gateways

Apart from banks, crypto investors also have the option to use payment gateways and UPI, both of which are working well, industry experts said.

“Payment gateways are largely used by investors. Multiple payment gateways are working and plan to continue working with crypto,” Gupta said.

Regulatory uncertainty

The lack of regulatory certainty continues to be a challenge to some extent but there is now more of an understanding towards the sector.

With growing investor interest in cryptocurrency, a number of banks had earlier this year warned users about virtual currency transactions, citing the Reserve Bank of India’s 2018 circular.

However, the RBI had on May 31 asked regulated entities to not cite its April 2018 circular on “Prohibition on dealing in Virtual Currencies” as it is no longer valid following the Supreme Court ruling.

Also see: More than 2 lakh crypto accounts blocked in India over 6 months

It had also asked them to continue to carry out customer due diligence processes in line with regulations governing standards for Know Your Customer, Anti-Money Laundering (AML), Combating of Financing of Terrorism (CFT) and obligations of regulated entities under Prevention of Money Laundering Act, 2002.

However, a banker noted that it still depends on the judgment of individual banks and how they wish to proceed on the issue.

Published on October 20, 2021

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