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The Reserve Bank of India Bans Regulated Entities From Dealing In Virtual Currencies

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The Reserve Bank of India Bans Regulated Entities From Dealing In Virtual Currencies
The reserve bank of india bans regulated entities from dealing in virtual currencies

India virtually banned cryptocurrencies like bitcoin with the Reserve Bank of India barring regulated entities from providing services to any individual or business dealing in digital currencies.

The central bank has given three months to regulated entities like banks to unwind their positions with the entities related to cryptocurrencies, RBI Deputy Governor BP Kanungo said in a media conference Thursday, April 5.

“Technological innovations, including those underlying virtual currencies, have the potential to improve the efficiency and inclusiveness of the financial system. However, Virtual Currencies (VCs), also variously referred to as crypto currencies and crypto assets, raise concerns of consumer protection, market integrity and money laundering, among others.

Reserve Bank has repeatedly cautioned users, holders and traders of virtual currencies, including Bitcoins, regarding various risks associated in dealing with such virtual currencies. In view of the associated risks, 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,” the RBI said in a statement.

According to BP Kanungo, RBI deputy governor, 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,” he added.

Earlier this year, India’s Finance Minister Arun Jaitley said that the government doesn’t consider cryptocurrencies as legal tender and will take all measures to eliminate payments using them.

The regulator, however, decided that it will promote the use of blockchain – a public ledger that serves as the backbone of bitcoin – in financial services for strengthening transparency and improving inclusion. In line with central banks around the globe, the RBI too is mulling introducing a fiat digital currency.

“These are issued by the central bank and are considered the liability of the central bank,” Kanungo said. “They will be in circulation in addition to the paper currency that we have. It also holds the promise of reducing the cost of printing notes.”

RBI added it will issue detailed guidelines in a circular soon.

News – CCN
India Bans Banks from Processing Cryptocurrency Purchases

Indian residents can no longer purchase cryptocurrency through their bank accounts, according to new measures adopted by the country’s central bank. The sweeping policy, announced on Thursday by the Reserve Bank of India (RBI), prohibits RBI-regulated institutions from allowing their customers to purchases cryptocurrencies, and it also bars banks from providing services to businesses “dealing

The post India Bans Banks from Processing Cryptocurrency Purchases appeared first on CCN

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Wall Street Bank Oppose Bitcoin Futures, But Goldman Sachs is Ready

Earlier this week, some of the global finance market’s largest banks including Goldman Sachs, Morgan Stanley, JPMorgan, and Citigroup opposed the launch of bitcoin futures, claiming a lack of transparency and regulation.

The open letter submitted by the Futures Industry Association (FIA) representing the abovementioned banks read:

“While we greatly appreciate the CFTC’s efforts to receive additional assurances from these exchanges, we remain apprehensive with the lack of transparency and regulation of the underlying reference products on which these futures contracts are based and whether exchanges have the proper oversight to ensure the reference products are not susceptible to manipulation, fraud, and operational risk.”

Goldman Sachs Changes Stance, JPMorgan Claims bitcoin Futures Will Grant the Cryptocurrency Legitimacy

According to Bloomberg, Goldman Sachs, the $95 billion investment bank, is planning to clear bitcoin futures on behalf of its clients upon the launch of the bitcoin futures exchanges of CBOE and CME, two of the world’s largest options exchanges.

A source familiar with the matter stated that Goldman Sachs will clear client trades on a case-by-case basis, to ensure the process remains secure and efficient for clients.

Goldman Sachs spokeswoman Tiffany Galvin also stated:

“Given that this is a new product, as expected we are evaluating the specifications and risk attributes for the bitcoin futures contracts as part of our standard due diligence process.”

Previously, on December 1, JPMorgan global markets strategist Nikolaos Panigirtzoglou, told the bank’s clients that the launch of bitcoin futures exchange by CME and CBOE will add legitimacy to the cryptocurrency, and allow it to evolve into the next gold.

“The prospective launch of bitcoin futures contracts by established exchanges in particular has the potential to add legitimacy and thus increase the appeal of the cryptocurrency market to both retail and institutional investors,” said Panigirtzoglou, emphasizing the expected flow of tens of billions of dollars into the bitcoin market over the next few weeks.

Leading financial institutions and major banks have opposed the launch of bitcoin futures primarily because the listing of bitcoin futures will likely trigger a massive inflow of institutional money. Coinbase CEO Brian Armstrong estimated the amount to be $10 billion, which is expected to move into the bitcoin market by the year’s end.

Listing of bitcoin Futures Threatens Major Banks

As Ari Paul of Blocktower noted, the rapid and exponential growth rate of bitcoin, and the entrance of tens of billions of dollars into the bitcoin market will lead to the cryptocurrency penetrating into the multi-trillion dollar offshore banking industry, which brokerages such as JPMorgan and Goldman Sachs dominate.

If bitcoin continues to grow at the current rate, which will likely be the case with the listing of bitcoin futures by large-scale exchanges, it will begin to challenge the industries and markets controlled by the global financial sector’s leaders, such as JPMorgan.

“In all, the prospective introduction of bitcoin futures has the potential to elevate cryptocurrencies to an emerging asset class,” Panigirtzoglou stated, adding that  “the value of this new asset class is a function of the breadth of its acceptance as a store of wealth and as a means of payment and simply judging by other stores of wealth such as gold, cryptocurrencies have the potential to grow further from here.”

The post Wall Street Bank Oppose Bitcoin Futures, But Goldman Sachs is Ready appeared first on NEWSBTC.

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