Crypto traders cry foul against RBI crackdown on virtual currency

India logo is seen at the entrance gate of its headquarters in Mumbai

Besides, the fact that a range of countries preliminarily restricted the cryptocurrency market had a great influence on the Indian central bank.

The central bank, however, clarifies that it will continue to promote the use of blockchain in financial services for strengthening transparency and improving inclusion.

The RBI move comes at a time when banks already battling near-record levels of soured loans are staring at an increase in stressed assets after a rule change announced in February.

"If [cryptocurrencies] grow beyond a critical size they can endanger financial stability".

Experts say that investors in India can technically still hold on to their Bitcoin and other digital currency and can also trade in cash or through a foreign bank account. It does not mention that a copy of it can not be stored overseas, according to Medianama.The RBI will issue detailed instructions by next week. Regulated financial institutions can provide no service directly related to digital currency.

He further said that having such a currency will also reduce the cost of printing and circulating paper currency. It has also set up a panel to study the desirability and feasibility of introducing a virtual currency, and the group will submit its report by the end of June. However, it must be noted that countries launching their own line of digital currency are completely against the fundamental idea of having a decentralized cryptocurrency. Surprisingly, no Indian cryptocurrency business came ahead with an announcement or even expressed regret over the government's myopic decision.

The RBI has not responded to any of these angry tweets.

Around the world, governments are ramping up regulations, as the industry looks to settle and mature in the years going forward.

Much of this can be attributed to the massive rise in the value of bitcoin in 2017, which brought forth a lot of mainstream media attention.

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