IDFC First Bank, a private sector lender, has made the most significant decision regarding cryptocurrency transactions. IDFC’s first bank said today that transactions will be restricted to the cryptocurrency industry, i.e., persons who have an IDFC bank account will be unable to make cryptocurrency transactions via their accounts.
IDFC First Bank has repeatedly suspended services related to cryptocurrency exchanges in the last few months. Perhaps it was a clear indication that the bank is not yet ready to support the virtual crypto currency.
ICICI Bank, Yes Bank, and Paytm Payments Bank have all cut connections with the cryptocurrency market. Customers of HDFC Bank and the State Bank of India have also been warned against dealing in virtual currencies like Bitcoin. This caused the Reserve Bank of India to issue a clarification on its 2018 circular. Although there was no official notification, the RBI had previously informally advised banks to steer away from companies dealing in cryptocurrencies.
The problems started in 2018 when the Reserve Bank of India issued circular ordering banks and financial institutions to refrain from providing services to cryptocurrency exchanges. The RBI round was overturned by the Supreme Court in 2020, allowing a number of exchanges to restore operations in India.
In India, there are around 15 million cryptocurrency investors with a total value of 10,000 crores in digital assets. As a result, it’s possible that the government will hesitate from making any decisions that may have an influence on this large number of Indian investors. Such moves also upset cryptocurrency investors for the wrong reason.
Shivam Thakral, CEO of BuyUcoin commented on the issue, “The root cause of the problem is the unregulated tag of the crypto industry in India. Since the industry is unregulated, it creates confusion among the services providers as there are no set guidelines. We need to address the larger policy issues to unlock the true potential of digital asset economy in India.”
We are all aware that a single tweet and even an announcement from large major traders impact the crypto market. Bitcoin has again dropped, increasing the risk of losing investment by this unfortunate market instability. It may be the cryptocurrency market if there is maximum instability in the market.
Perhaps as a result of the tremendous instability and significant financial risks, cryptocurrency is not supported by Indian banks. Most of the crypto-investors in India now wait for the final announcement about the legitimacy of the cryptocurrency in India. The chaos may be inferred from the rising number of cryptocurrency investors in India and the quickly expanding number of cryptocurrency exchanges based in the country.