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Banks in India have been closing the accounts of customers they believe have made transactions involving cryptocurrencies. The majority of crypto users in the country, however, have reportedly found a way to avoid their accounts being closed by their banks which are complying with the crypto banking ban imposed by the country’s central bank.
Avoiding Problems With Banks
Reports of banks in India closing customer accounts with cryptocurrency-related transactions have been on the rise. Banks cite compliance with the circular issued by the country’s central bank, the Reserve Bank of India (RBI), that bans them from providing services to customers and businesses dealing with cryptocurrencies.
A spokesperson for local cryptocurrency exchange Instashift told news.Bitcoin.com that banks have been closing the accounts of customers when they find any cryptocurrency-related words such as “bitcoin” in transaction remarks. He clarified that if a customer’s bank account “comes under scrutiny and the bank officers read the crypto keywords in remarks” then the bank account will be closed.
The CEO of crypto exchange Wazirx, Nischal Shetty, shared with news.Bitcoin.com on Tuesday that the:
Majority of the people understand not to enter such terms in the remarks. So simply avoiding entering anything related to crypto in the payment remarks is more than enough to avoid any problems from banks. There’s no other way for banks to know if a P2P transaction was done to transact in crypto.
Other Indian crypto users agree with this strategy. Twitter user Cryptomaniac advised, “Use P2P without writing anything related to crypto in remarks. And don’t do heavy transactions.” P2P is the exchange-escrowed peer-to-peer style of trading which has been growing in popularity since the RBI ban. Most crypto exchanges in India offer this type of trading. Another Twitter user, Vivekmacha, agreed and wrote that “If we use P2P they can’t track us,” emphasizing the importance of not writing any crypto-related terms such as bitcoin or BTC in remarks when making transactions.
The Instashift spokesperson explained that crypto users that have their bank accounts closed just “open a fresh account in another bank” and continue to trade without “using any crypto terms for transactions,” emphasizing:
It’s easy to open a new account for a person in India & banks also welcome people to open accounts.
He noted that “no matter how many accounts you open, all bank accounts get linked with your PAN card” which he said is similar to the social security number used in the U.S.
More Banks Closing Accounts of Crypto Users
Many banks in India have been closing customer accounts showing evidence of cryptocurrency transactions. Two major banks in the country — Kotak Mahindra Bank and Digibank — have recently gained more attention for doing so when Twitter user Indiancryptogirl posted letters she claimed to have received from them. Digibank is powered by DBS, a major Asian financial services group. “We have observed few transactions in your account with brokers / traders, dealing in virtual currencies,” the letter reads, adding:
Since these types of transactions are not permitted in India, we are constrained to place a credit freeze in your account. Further as per the extant guidelines, we are required to exit such relationships where transactions with brokers / traders, dealing in virtual currencies are observed.
A credit freeze, the bank explained, means that customers “will not be able to deposit any funds” into their accounts. The bank proceeded to inform that “Hence 30 days from the date of this communication your account will be closed by the bank.”
Kotak Mahindra Bank and Digibank are not the only ones taking a hostile approach toward customer accounts showing crypto transactions. Twitter user Pushpendra Singh wrote, “So many Indian banks doing the same thing,” claiming that one of them is UCO Bank. Another Twitter user, Bluecrypto, said the “same happened with me and my HDFC account got closed.”
Another bank with a similar policy is Standard Chartered bank which requires customers opening an account in India to agree to this statement: “I confirm that this account will not be used for settling transactions or dealing in virtual currencies, including but not limited to bitcoins.”
However, Twitter user Yatharth Vashishth pointed out that banks are only following RBI’s order. “Kotak Bank is acting as per regulations by the RBI. All banks are instructed to shut accounts of all entities dealing in crypto. Not a big deal.”
What do you think of how Indian crypto users respond to banks closing their accounts? Let us know in the comments section below.
Images courtesy of Shutterstock.
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The post How Indian Cryptocurrency Users Avoid Banks Closing Their Accounts appeared first on Bitcoin News.
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The Bank of International Settlements (BIS) has published a survey showing that most central central banks are “proceeding cautiously” on issuing their own digital currencies. Only a handful are planning to do so in the near future, it said.
70 Percent of Central Banks Working Towards Own Digital Money
Swiss-based BIS, dubbed the central bank of central banks, surveyed 63 of its members on central bank digital currencies (CBDC), a form of government issued digital money that might not necessarily be underpinned by blockchain, as the case is with bitcoin.
About 70 percent of the banks surveyed said that they were involved in some kind of work to issue their own CBDCs, according to the report, which gathered views from central banks that are responsible for 80 percent of the world’s population.
Five central banks have initiated pilot projects, including the central banks of Sweden, Uruguay and South Africa. BIS found that less than a quarter now have the authority to issue a digital currency of their own in the near term and 40 percent remain uncertain. Many are progressing from conceptual work into experimentation and proofs-of-concept, but a great number remain unsure of issuing their own digital coins.
“Only a limited number of central banks are proceeding to the pilot stage with CBDCs, and even fewer see issuance of a CBDC as likely in the short or medium term,” reads the report. “At this stage, most central banks appear to have clarified the challenges of launching a CBDC but they are not yet convinced that the benefits will outweigh the costs.”
The survey revealed that “central banks are proceeding cautiously, and also that they are collaborating and sharing the results of their work.” It highlighted two types of digital currencies that can be issued by central banks – wholesale and general purpose. Whereas wholesale digital currencies are generally limited to specific tasks such as interbank payments, general purpose currencies are designed to replace cash and will be made available to the public. The report said:
Caution and collaboration will reduce the likelihood of unintended consequences. To meet the payment needs of the future, physical cash is unlikely to be the main answer. Most people will have to wait to use a central bank digital currency. However, central banks are working hard to make sure the wait is worth it.
‘Bitcoin Is a Niche Pursuit’
While some central banks from Canada, Singapore and South Africa are attempting to replicate wholesale payment systems using distributed ledger technology – the backbone of major independent cryptocurrencies such as bitcoin – almost all of them refused to acknowledge the impact of these digital currencies in their jurisdictions. Central bankers tended to regard cryptocurrency as a niche pursuit, rather than as the future of money.
“No central banks reported any significant or wider public use of cryptocurrencies for either domestic or cross border payments in their jurisdictions,” BIS said. “Usage of cryptocurrencies is assessed to be either minimal (‘trivial/no use’) or concentrated in niche groups.”
BIS added that the majority of central banks believe that the use of cryptocurrency “will remain minor” due to “low retail acceptance, compliance issues, better public understanding by the general public of the risks involved and, for some jurisdictions, outright bans.”
What do you think of central bank digital currencies? Let us know in the comments section below.
Images courtesy of Shutterstock and BIS.
Need to calculate your bitcoin holdings? Check our tools section.
The post Report Claims Central Banks Are Cautious About Issuing Their Own Digital Currencies appeared first on Bitcoin News.
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