Effect of RBI deadline on Crytocurrency trading
July 6, 2018 11:38 am,
RBI’s rule to prohibit banks and other financial institution from providing any service related to virtual money or Cryptocurrency has been implemented from Thursday. It has posed a huge setback for those who thought to trade in Bitcoin or any Cryptocurrency. However this petition of RBI does not mean that there will be death of Cryptocurrency and it’s trading in India as RBI has only banned banks or other financial institution from associating with Cryptocurrency services including transfer of receipt of money in accounts relating to purchase or sale of virtual currency.
The results or consequences of RBI’s prohibition are as follows:-
- NO FIAT:Previously, one could buy or sell cryptocurrencies such as Bitcoin on exchanges. The process involved transferring money to a bank account linked to the exchange and getting the equivalent number of Bitcoin but starting from Thursday this all won’t be possible. Some exchanges will become Peer to Peer (P2P) that means it will connect you with other trader, with whom you can buy or sell Bitcoin. P2P trading, as of now, will only let you trade bitcoin for another crypto, say Litecoin, and not fiat.
- BLACK MARKET: Holders of Bitcoin will have to approach buyers on marketplace exchanges—think of OLX—or black market to convert crypto to rupee or any other fiat.
- NO LOANS: Cryptocurrency companies or Exchanges will now not be issued loans by banks, or even be allowed to hold a corporate account.
- BURDEN FOR NEW TRADERS:This petition of RBI will hit new Bitcoin traders more than the experienced ones. Anyone wanting to be a Bitcoin investor in India will now have to buy from peers and not exchanges, most probably after paying a premium over the current exchange rate that is 1 bitcoin trades for over Rs 4, 30,000.
- DIMINISHING WALLET:Bitcoin firms such as Zebpay lets one store rupee value in wallets just like your regular online wallets. This money could get stuck if not withdrawn or converted.