The Reserve Bank of India barred the trading of Bitcons and other cryptocurrencies, disallowing banks and financial institutions from dealing with them. The RBI further talked about constantly warning users about the element of risk associated with trading in these currencies.
In a statement issued on the 5th of April, 2018, the RBI said declared that banks and financial institutions regulated by it should not provide services to business enterprises as well as individual players that deal with these virtual currencies. The RBI is expected to issue another circular in the near future regarding the trade of these currencies.
Further, the Central Bank has given banks and financial institutions that currently have business relationships with entities dealing with these currencies to snap ties within a period of three months.
The past several months have seen the Reserve Bank issue multiple notices/circulars to financial institutions as well as individuals about the risks involved in dealing with these currencies, while also going to the extent of comparing cryptocurrencies like Bitcoins to Ponzi schemes. Moreover, it has also, on several occasions, clarified that it does not support, nor has it granted any license to companies or financial institutions to trade or deal with these virtual currencies.