India Bans Bitcoin Wallets, Bank Funding, All Cryptocurrency Services

Don’t expect India’s 1.3 billion residents to be investing in Bitcoin or other virtual currencies any time soon.

According to a report from the Economic Times, the Reserve Bank of India has issued a blanket ban on all cryptocurrency trading.

You will not be able to buy cryptocurrency via banks or e-wallets etc. in India anymore as Reserve Bank of India (RBI) has banned them with immediate effect from “dealing with or providing services to any individuals or business entities dealing with or settling virtual currencies”.

Though the country says it understand the need for supporting blockchain related technologies, the exchange of virtual currencies is now prohibited on every level, including the purchase of digital assets via bank accounts or debit cards, as well as the utilization of wallets to transfer assets.

The RBI issued a statement on the matter with guidance to follow:

“It has been decided that, with immediate effect, entities regulated by RBI shall not deal with or provide services to any individual or business entities dealing with or settling VCs. Regulated entities which already provide such services shall exit the relationship within a specified time. A circular in this regard is being issued separately”

RBI governor BP Kanungo, at a press conference Thursday, suggested that Bitcoin is dangerous to the stability of India’s monetary system:

Internationally, while the regulatory response to these tokens are not uniform, it is universally felt that they can seriously undermine the AML (anti-money laundering) and FATF (Financial Action Task Force) framework, adversely impact market integrity and capital control…

And if they grow beyond a critical size, they can endanger financial stability as well.

The attack on cryptocurrencies by centralized financial institutions in the name of “protecting investors from volatility” continues.

Last week one of Canada’s largest banks blocked cryptocurrency purchases, a move that followed similar bans in the United States by large banks like JP Morgan.

Despite the news, cryptos are roughly unchanged in the past 24 hours, although as discussed earlier this week, only after suffering their worst quarter on record.