![Reserve Bank of India gave clarity on the 2018 Cryptocurrency circular](http://bitcoinworld.co.in/wp-content/uploads/2021/05/Reserve-Bank-of-India-gave-clarity-on-the-2018-Cryptocurrency-circular.jpg)
Reserve Bank of India clarifies the 2018 cryptocurrency circular asking banks to carry out their customer due diligence. The process should be carried out in line with regulations governing standards for KYC, anti-money laundering, combating of Financing of terrorism, and obligations of regulated entities under the prevention of money laundering act 2002.
Banks started Warning Customers.
The circular came shortly after major Indian banks started warning customers against using their services to trade in cryptocurrencies. However, RBI and the government have not formed any opinion on cryptocurrencies. Several Indians have taken exposure into the Crypto market already.
RBI Clarification
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The RBI clarified that banks and other regulator entities could not cite its 2018 circular on cryptocurrencies. This is because the Supreme Court of India set the circular aside in March 2020. HOWEVER, the RBI also added that the circular is not valid from the date of the Supreme court order and hence cannot be cited or quoted.
Foreign Exchange Management
Banks also should ensure compliance with relevant provisions under the foreign exchange management act for Overseas remittances. Nischal Shetty is the co-founder and CEO of WazirX. He said that doing due diligence on a business is what banks do for all businesses. However, he added that this notification clarifies that RBI hasn’t asked any banks to stop their services.
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