A new day and new development that is keeping cryptocurrency market in India on seesaw. Just a day after RBI issues directive to all financial institutions that cleared the payment processing for all cryptocurrency enthusiasts, be it traders, wallets or exchanges, banks are reluctant to resume services required to process such transactions.
In a big setback, all the leading banks SBI, HDFC, Axis and ICICI Bank have informed cryptocurrency exchanges in India that resume services on an immediate basis is quite unlikely, according to few media reports.
In 2018 RBI barred all the banks from processing any cryptocurrency related transactions citing legality and regulations. Yesterday, RBI clarified to all financial institutions that the circular now remains invalid as the ruling of the Supreme Court of India made that circular null and void.
After yesterday’s development, all Crytocurrenmcy exchanges rejoiced as they believed that banks will no longer be able to block any transactions related to cryptocurrency. However, the latest stand by the leading banks has surprised many.
Banks are citing uncertainly over the legality and regulations behind their decisions of staying away from transactions related to cryptocurrencies.
Undoubtedly, it’s a big blow for cryptocurrency exchanges in India. The happiness expressed by the founders of WazirX and CoinDCX was short lives as they still find their business in soup.
Cryptocurrency Market: Crashing Fast
In the last 2 months, the global cryptocurrency market has been making unprecedented waves. The market cap of the worldwide cryptocurrency market first reached an all-time high $2.4 trillion in May 2021, then crashed to $1.4 trillion after wiping off a whopping $1 trillion in just 3 weeks has raised a lot of questions and suspicion about the future of currently traded cryptocurrencies, which are yet to get any legal acceptance or backing.
More damages came in form of tweets from the world’s top billionaire Elon Musk. He first announced to invest in Bitcoin and accept it for Tesla Cars but backtracked on his decision in few weeks.
The worldwide cryptocurrency market is deal with a tough time as Elon’s future moves, including the possibility of getting rid of bitcoins worth $1.5 billion, could prove to be fatal for the whole market.
Crypto exchanges also want to take no responsibilities being KYC or knowing the verifying their users who are involved in crypto trading. In such scenarios, Indian banks can’t be criticised for being adamant about not resume cryptocurrency-related services anytime soon as they decide to play safe.