Cryptocurrencies are digital or virtual currencies in which encryption techniques are used to regulate the generation of their units and verify the transfer of funds, operating independently of a central bank.
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Leading private lender HDFC Bank has started cautioning its customers against dealing in cryptocurrencies such as Bitcoin, Ethereum, and others, according to emails sent by the bank.
Reports suggest that these emails were sent to a specific group of customers, enquiring about the process of transaction or advice against such transactions, citing the 2018 circular issued by the RBI (DBR.No.BP.BC.104 /08.13.102/2017-18 dated 6 April 2018), which was later struck down by the Supreme Court.
The circular, DBR.No.BP.BC.104 /08.13.102/2017-18 dated 6 April 2018, had advised banks to exercise due diligence by closely monitoring transactions carried out in the account regularly.
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Cryptocurrencies are digital or virtual currencies in which encryption techniques are used to regulate the generation of their units and verify the transfer of funds, operating independently of a central bank.
The RBI had virtually banned cryptocurrency trading in 2018 and had directed all entities regulated by the central bank to cease dealing in virtual currencies. The Supreme Court had also asked the Centre in 2019 to frame policies for crypto, and in 2020, struck down the curbs imposed by the RBI.
However, RBI last month had asked lenders informally to stay away from interfering in any transactions dealing with cryptocurrencies.
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