Following new regulatory measures from the Reserve Bank of India prohibiting banks from providing services to cryptocurrency businesses, some Indian banks are taking drastic measures to discourage cryptocurrency adoption, reportedly requiring customers to sign contracts stating that they will not use cryptocurrencies of any kind as part of their new terms of service agreement.

Line in The Sand

The new measures effectively force customers to choose between banks and crypto, perhaps a difficult decision for many supporters of the fledgling cryptocurrency movement. While many hope to see cryptocurrency overtake traditional banking entirely, the infrastructure to do that simply isn’t there at the moment, and actions such as these carried out by banks on a large scale only make it more difficult to foster adoption – which, of course, is likely the point.

@DesiCryptoHodlr or “Indian Crypto Girl” on Twitter posted an image of the terms and conditions required by Kotak Mahindra Bank as an example of the new, strict measures being taken against cryptocurrency users.

Image courtesy: @DesiCryptoHodlr

The bank asks users to declare that they “will not deal with any transactions related to Crypto-currency including Bitcoins,” adding that the Bank reserves the right to close their account if they should breach the agreement.

Similar warnings are displayed on the bank’s ATM screens:

Virtual currencies (VCs) are not legal tender and do not have any regulatory permission or protection in India. We request you not to make transactions involving any VCs from any of your account/s. For any such transactions, the bank shall be acting in accordance with the regulatory guidelines which include closing your account without further intimation.

The bank claims to be acting in accordance with IRB regulations, and Crypto Girl stated on Twitter that this is just one of many banks forcing their customers to swear off crypto if they want banking services. Another Twitter user @IAmCryptoLegend commented in the thread to say that that banks are implementing similar measures in neighboring Pakistan.

Indian CryptoGirl@DesiCryptoHodlr · Jan 9, 2019

Indian Banks now forcefully taking permission from us to ‘reserve right to close our account without further intimation’ if we deal in #cryptocurrency transactions

Ability to decide what to do with our own money is the very reason we need to invest, #BUIDL, & believe in #bitcoin

View image on Twitter

TenUp National@IamCryptoLegend

🇵🇰
☹️

Same texts we received on our cells here in Pakistan 26:07 PM – Jan 9, 2019Twitter Ads info and privacySee TenUp National’s other Tweets

This was confirmed by a screenshot of a text message from Faysal Bank warning customers not to use cryptocurrencies:

IRB Vs Crypto

The Indian central bank has taken a stand against cryptocurrency, citing issues of security and volatility. The bank’s governor Raghuram Rajan does concede that bitcoin is “fascinating” to him, and states his belief that India and perhaps humanity, in general, will move towards a cashless society in time.

For us at the Reserve Bank, this may happen in 10 to 20 years from now. [I] think these virtual currencies will certainly get much better, much safer and over time will be the form of transaction, and that’s for sure.

While the IRB has not banned cryptocurrency outright and Indian citizens are still legally free to use cryptocurrencies if they wish, the growing trend of banks refusing services to crypto-users could put many citizens in a tight spot, forcing them to choose between the underdeveloped system of the future and the outdated system of the past.

This post credited to CCN. Featured image from Shutterstock.

Delhi cyber crime police have made further developments in the unfolding cryptocurrenvy scam run by an organization going by the name ‘Flintstone Group’.

The group launched a fraudulent cryptocurrency called Money Trade Coin (MTC), hoodwinking 25,000 investors with promises of massive returns which, of course, never materialized. After making three arrests last year including Flintstone Group managing director Amit Lakhanpal and his chief accountant Sachin Shelar, the Delhi police cyber crime unit arrested a fourth man, Rohit Kumar, on Tuesday. A resident of Kanpur, Kumar was a collection agent working on behalf of the accused.

The Scam

The Flintstone Group went to great lengths to convince investors of the legitimacy of their project, posing as Union Finance Ministry officials at one point with fake I.D. cards and backstories. In the name of the Money Trade Coin project, they even participated in approaching the Delhi High Court to petition the central bank to reconsider its harsh stance against cryptocurrencies.

Real estate CEO and scam mastermind Lakhanpal allegedly attended events in Dubai, some of which was reportedly attended by the royal family. There he is said to have claimed that his cryptocurrency would soon be accepted by the Ministry of Finance and would be used as legal tender with which to buy real estate and that MTC had offices in the UK, Singapore, Italy, and Malaysia.

Money Trade Coin@moneytradecoin

Money Trade Coin Group takes leap, Expands its Global Footprints in Thailandhttps://goo.gl/AsJrRC 210:16 PM – Jan 8, 2018Twitter Ads info and privacySee Money Trade Coin’s other TweetsTwitter Ads info and privacy

“The accused also showed prospective clients an article in an international magazine, which claimed that one of the royals was his partner,” said a police officer.

Aftermath: Scammers at Large

The scammers worked from an office in Delhi to manipulate investors into buying into the phony cryptocurrency, and 70 employees have been left stranded following the police bust. Police are now investigating the extent, if any, of their involvement in the group’s illegal activity.

Lakhanpal and chief accountant Shelar have since fled the country, perhaps to Dubai or England – however, they remain at large and their exact whereabouts are unknown.

“The accused had set up office in Delhi’s Vikram Nagar and used to collect money from investors promising high returns. Lakhanpal was earlier holed up in Dubai and we believe that he may have fled to London,” said a police source.

A case was filed against five men in total, with charges including fraud and criminal conspiracy. 53 laptops have been seized as well as rubber stamps for fake authentification of documents and the documents themselves. Incidents such as these have contributed to a negative stigma of cryptocurrencies in India with the central bank considering banning the technology altogether.

This post credited to CCN Featured image from Shutterstock.

The Reserve Bank of India has shelved its plan to launch a state-backed cryptocurrency amidst increased government pressure and concerns around money laundering.

Indian Government Still Cautious About Cryptocurrencies

It seems that regulatory clarity has evaded the crypto community in India, yet again. The country’s central bank announced it was looking at issuing its own digital currency back in April of 2018 and set up an interdepartmental group to conduct a feasibility study.

While the findings of the study were meant to be published by June 2018, the report has yet to see the light of day. An unnamed source told the Hindu Business Line that the government doesn’t want to implement a central bank digital currency (CBDC) anymore. The development might explain the lack of news on the topic.

Narendra Modi’s government is still refusing to provide any respite for investors or cryptocurrency exchanges. So far, Pon Radhakrishnan, the minister of state for finance, admitted that no deadline has been made to regulate the digital asset class.

The Country Still Not Ready for a CBDC

The Reserve Bank of India has echoed the parliament’s stance, refusing to ease pressure on the industry. The central bank has banned banks from servicing cryptocurrency exchanges, companies, and traders, effectively stifling the industry.

Related: India Stalls Cryptocurrency Regulations, Uncertainty Continues

The bank’s plan to launch its own central cryptocurrency was well received, with many thinking that the move could pave the way for other digital currencies to enter the market. The Reserve Bank planned on using the CBDC (Central Bank Digital Currency) to tackle money laundering.

Yet, the RBI still doesn’t have a formal unit in place that would track and format policies on cryptocurrencies or blockchain, which is indicative of a general lack of preparedness.

Praveen Kumar, the founder of cryptocurrency exchange and blockchain start-up Belfrics, told the Hindu Business Line that it’s is still too early for RBI to issue its own cryptocurrency and that delaying the process was the right decision.

Kunal Nadwani, the CEO of uTrade Solutions, was optimistic about the future of cryptocurrencies. That said, he also mentioned that central banks need time before making the transition as the economic effects of cryptocurrencies are “sizeable and largely unknown.”

This post credited to cryptoslate Image source: Cryptoslate

The World Bank in its latest report revealed that India has received the largest amount in remittance in 2o18 with $80 billion being sent from abroad. At the same time, users paid $4 billion in cuts to payment services.

Middlemen-Friendly Models

Remittance in its current format has one-too-many checkpoints. If a person wants to send money from, say, New York to New Delhi, his funds are going through several intermediaries within the payment corridor. There is a local bank that would first send the funds to a banking partner in London. There the payment would wait for confirmation for a few days before making its way to the, say, Dubai, where the partner bank of the New Delhi bank is located. Add a few more days before the funds get confirmed and sent to the destined New Delhi bank account.

In the entire process, each participant takes away a considerable part of the funds. This is how traditional remittance models become too expensive for day-to-day users.

According to the World Bank, in more than 25% of the remittance corridors, commissions are more than 10% higher. So sending a $100 back home can at least cost one $10 in cuts.

Crypto in Remittance: Why India should Explore It?

The rapid speed at which the digital economy is developing promises to change the dynamics of the remittance industry as a whole. Blockchain, for instance, has opened alternative payment corridors where money can be sent as quickly as email – without paying hefty commissions. In times when people lose on average 7.45% of their money in fees, according to the World Bank, the use of blockchain could reduce the spending to as minimum as 1%.

Crypto Kanoon@cryptokanoon

Indian Tops Remittances in 2018.

$80bn sent back home.

$4bn paid as cost to International money transfer companies for sending this money back to India.

Adoption of crypto by India can eliminate this middlemen and save Billions for our nation.

Simple!

132 people are talking about this

However, India’s stance on cryptocurrencies hasn’t been entirely optimistic. The Reserve Bank of India (RBI) this year issued a circular, ordering banks to discontinue relationships with crypto companies. While the decision slapped the local exchange market, it also hampered the growth of many startups that were brewing inside the blockchain space.

Indian banks, at the same time, have partnered with global blockchain initiates to build low-cost remittance solutions. That again would require them to use cryptos to settle payments. The current legal framework, according to the RBI, cannot define cryptos which again is keeping Indians from exploring a cheap remittance model.

At the same time, banks using blockchain cannot generally reduce the existing intermediaries out of a payment corridor. It can only speed up settlements at best while charging the same kind of commissions.

India can anytime explore an interbank network based on the blockchain technology after allowing a central token to be issued on it. Nevertheless, it would still require them to bring all the banks on the same page – something that looks unlikely. In simple words, if one bank works like WhatsApp and other works like Instagram, the user of WhatsApp cannot dispatch messages to the users of Instagram, i.e. they would need a single protocol in common, like NEFT on steroids.

Meanwhile, Indian remittance users could keep exploring cheaper decentralized payment models like bitcoin despite the banking ban. A good number of Indian freelancers are already accepting Bitcoins as payments and exchanging them for Indian Rupees via p2p exchanges.

 

This post credited to News BTC Image source: News BTC 

The Indian state government of Andhra Pradesh wants to build a community of blockchain startups in the region.

The Andhra Pradesh Innovation Society (APIS) announced Wednesday that it was partnering with the Eleven01 Foundation to develop a blockchain talent pool and support startups building with the nascent technology.

Eleven01 is a local provider of native blockchain protocols.

APIS is tasked with developing “an exceptional technology startup ecosystem,” according to a press release. As such, the partnership is aimed at using events, activities and mentorship programs to “nurture talent and develop a community” of startups within the state.

In a statement, J.A. Chowdary, IT advisor and special chief secretary to the chief minister of Andhra Pradesh, said “we truly appreciate what the Eleven01 team is trying to do and we are happy to associate with them to bring advanced development and innovations with regard to the blockchain realm in the state.”

Eleven01 Foundation’s president & chief product officer, Ramachandran Iyer, echoed Chowdary’s comments, saying:

“We visualize India to be a blockchain-hub and the support from the state here brings us a step closer to achieving that. Together, we will contribute towards the development of the best blockchain-ready talent pool and innovations in the state.”

Eleven01’s blockchain protocol was built in association with Indian IT services giant Tech Mahindra. The platform was announced back in August, and aimed at strengthening the blockchain ecosystem in the country.

Wednesday’s move is just the latest blockchain-focused effort by the government of Andhra Pradesh. Earlier this year, the state signed a Memorandum of Understanding with Covalent Fund to start a blockchain ecosystem, as well as launch a blockchain university with a $10 million initial investment.

In October last year, the state was also working with startup ChromaWay on a land registry pilot that uses blockchain to track the ownership of property.

This post credited to coindesk Image via Shutterstock 

Just one week ago, Indian officials arrested the co-founder of an Indian cryptocurrency exchange, Unocoin, for operating a Bitcoin ATM kiosk which the police called “illegal”. One of Unocoin’s co-founders has now given a recount of his arrest in a recent interview.

The Unocoin co-founder’s arrests were largely publicized and was seen by many as the Indian government’s way of flexing their muscles against the cryptocurrency industry, which they have been at war with since they first barred crypto exchanges from engaging in banking relationships earlier this year.

On October 23, Harish BV, one of the co-founders, was arrested at the Kemp Fort Mall in the southern city of Bengaluru just a week after Unocoin had installed, what it has advertised as, India’s first-ever Bitcoin ATM. Harish was working on the ATM and making sure that all the systems were flawless and fully operational before it went live.

Indian Government Not Wanting Exchanges to Bypass Ban Via Bitcoin ATMs

The ATM was unique in that it was meant to be a fiat gateway for Indian cryptocurrency investors looking to trade cryptocurrencies, as they could deposit funds that could in turn be used to trade cryptocurrency on the Unocoin platform. Users would also be given the opportunity to withdraw funds from their account.

Harish said that the operational tests and upgrades were in their final stages when police entered the mall and took him in for questioning. After questioning, they took him into custody, claiming that the ATM had violated Indian law as it lacked the required approvals.

The next day, Sathvik Vishwanath, another Unocoin co-founder, was also arrested by the police.

The kiosk cleverly exploited a loophole in the government’s so-called “cryptocurrency ban”, as it allowed investors to deposit and withdraw funds by removing the banking middle-man. The arrests were likely the governments way of saying that they will not tolerate exchanges utilizing any loopholes to bypass the banking relations ban.

After posting bail, Vishwanath recounted the situation to Quartz India, saying:

“I knew this was coming after Harish was charged. I was at home that morning, trying to figure out what needs to be done to get Harish out of police custody, when the officials came to my house. They took me for questioning and later I was also charged and sent to judicial custody.”

He also noted that the police had unfoundedly accused his exchange of duping customers, saying that he had “promised 2x returns” and was “trying to cheat customers”. Vishwanath noted that his exchange has never made any such promises to their clients, and that they have never received a complaint regarding anything of the sort.

The police’s cybercrime department also spoke about the arrests, saying that the exchange had not received permission from the state government to operate the kiosk, and further noted that they were operating “outside the remit of the law”.

Swaroop Anand, the lawyer representing the Unocoin co-founders, spoke about why the government’s actions were not justified, saying that the mall in which the kiosk was located would have already received the necessary approval and licensing to hold a kiosk of this sort.

“It is a kiosk that is being set inside the mall and the mall would have had already taken trade permissions. Therefore, there was no need for Unocoin to take any other permission and there had not been any violation of licence requirements.”

It still remains to be seen whether or not the police will begin arresting other cryptocurrency exchange executives on baseless charges in an effort to censor the industry.

This post credited to News BTC  Image source: News BTC

The head of an Indian nonprofit trade organization said cryptocurrency is “illegal,” and urged businesses to obey the law, local news daily the Hindu reportedThursday, Oct. 25.

Debjani Ghosh, the president of the National Association of Software and Services Companies (NASSCOM), was cited by the Hindu saying that cryptocurrencies are illegal from NASSCOM’s perspective. NASSCOM is a nonprofit trade association of over 2,000 member companies for the Indian IT and business process outsourcing industries.

“It is [the] law of the land and hence, we have to work with it,” Ghosh claimed about cryptocurrency’s ‘illegal’ status. She added, “If we do not agree, we have to go back to the government and speak about why cryptocurrencies aren’t correct.” However, Ghosh noted that the “illegal” status of crypto is the result of the government’s failure to keep up with innovation:

“The genesis of this problem, however, lies in the failure of policy making not keeping pace with rapid technological changes. NASSCOM’s focus would be to say, how do you synergize technological development and policy making. I think that will be our focus.”

Cryptocurrency is currently legal in India, but in July the Reserve Bank of India (RBI) banned the country’s banks from servicing businesses involved in exchanging or processing digital assets. At the time, RBI cited risks to financial stability and the security of investors as being the main reasons behind the ban.

Following the crackdown, commentators were quick to note that, while banking activities for crypto business were suspended, it was not a ban on crypto in India outright. The country’s supreme court continues to uphold the ban even after hearing a raft of petitions.

Since July, the ban has had severe repercussions for the industry. Exchanges in particular have faced difficult conditions, with major platform Zebpay halting operations and relocating to crypto-friendly Malta.

Ghosh’s comments come after police clamped down this week on a project from crypto exchange Unocoin, arresting its co-founders after they installed a Bitcoin ATM in a Bangalore shopping mall.

Various media outlets have cited authorities who reportedly explained that the ATM “had not taken any permission from the state government and is dealing in cryptocurrency outside the remit of the law.” According to a police official quotedby the Times of India, the central bank considers cryptocurrency “illegal.”

This post credited to Cointelegraph  Image source: Cointelegraph

The Indian subsidiary of major global banking and financial services firm HSBC and India’s holding giant Reliance Industries (RIL) have completed a blockchain-enabled trade finance transaction, Indian business newspaper The Hindu Business Line reports Sunday, Nov. 4.

The blockchain-powered letter of credit (LoC) transaction, reportedly the first of its kind in India, involved export by RIL to U.S. client Tricon Energy, which sufficiently reduced both the time and costs of processing documentation. The new system represents a significant improvement in global export market interactions by bringing all parties together on one platform, The Hindu Business Line notes.

According to the article, the transaction solution has been implemented through the integration of blockchain with an electronic bill of lading (eBL) platform dubbed Bolero. First introduced in November 2016, the Bolero eBL system allows for the issuance and management of electronic bills of lading, as well as enables digital transfers of goods titles from sellers to buyers in a trade.

RIL’s joint chief financial officer Srikanth Venkatachari commented that the new blockchain deployment has demonstrated a significant potential to reduce timelines involved in managing export documentation from the “extant seven-ten days to less than a day.”

Earlier this week, a group of major global banks, including U.K.-based HSBC, BNP Paribas, and Standard Chartered, launched a blockchain platform to address the financing of international trade. The platform, dubbed eTrade Connect, is reportedly able to reduce the time needed to approve trade loan applications from 36 to four hours.

In May of this year, international daily newspaper Financial Times reported on HSBC completing the first global trade finance transaction powered by blockchain. The transaction involved a LoC for U.S. food and agricultural conglomerate Cargill.

This post credited to Cointelegraph  Image source: Cointelegraph

Reuters reports that Mastercard has formally complained to the US government that the Indian government is deliberately promoting domestic payment networks over international ones like Mastercard and that the Prime Minister, Narendra Modi, has actively used nationalism in promotion of payment processing network RuPay.

According to the report, Mastercard and Visa are not the dominant payment modes in India – at least half of the country’s payment cards use the RuPay network.

Modi has likened the use of RuPay to public service because the transaction fees stay inside the country.

The complaint was in the form of a note to the Office of the United States Trade Representative from Sahra English, who serves as the company’s Vice President for Global Public Policy. It read, in part:

“Increasing rhetoric from the prime minister and government mandates on promotion and preference for RuPay […] continues to create market access issues for U.S. payments technology companies. The Indian government’s preferential treatment of RuPay coupled with fallacies on pricing must be discontinued.”

The move, in Mastercard’s view, will hopefully stimulate some form of action on the part of the US government. It is coupled with other pro-domestic moves on the part of the Indian government which are meant to increase local revenues, such as forcing foreign technology companies to store more data locally, which stimulates local data storage revenues.

Indian Government Seemingly Against Any Outside Payment Rails

Mastercard and other traditional payment processors are not the only payment providers to be the subject of government interference and/or disparaging. Crypto tokens are formally on the chopping block in the country, and the operator of a non-functioning Bitcoin ATM was recently arrested.

Trading has largely halted in India as a result of a ban in placesurrounding the practice. Indian Bitcoiners may find themselves in a similar situation as those in China, where theycan possess coins but not use them for much, although progress is being made on that front and it appears Chinese merchants can also accept Bitcoin. The trouble with local regulations is that they can often be confusing and widely vary from jurisdiction to jurisdiction.

India comprises almost a fifth of the global population and many of its residents live in the sort of poverty that cryptoassets, given the opportunity, can help alleviate. The question of how much such opportunity India will have remains to be answered, but to date it doesn’t look good.

This post credited to ccn Featured image from Shutterstock.

After months of public uncertainty bought on by years of deliberation by the Indian government, authorities have discussed the framework to legally ban the usage of ‘private’ cryptocurrencies like bitcoin.

In the 19th meeting of the Financial Stability and Development Council (FSDC) headed by India’s finance minister Arun Jaitley on Tuesday, the subject of cryptocurrencies took the floor.

According to a release by the Indian Government’s Ministry of Finance through the Press Information Bureau, the working group “deliberated on the issues and challenges” of cryptocurrencies in the country.

Pointedly, an inter-governmental committee tasked to study and propose a legal framework for cryptocurrencies has, instead, suggested a ban on using cryptocurrencies in India.

The full excerpt from the press release reads:

“The Council also deliberated on the issues and challenges of Crypto Assets/Currency and was briefed about the deliberations in the High-level Committee chaired by the Secretary (Economic Affairs) to devise an appropriate legal framework to ban use of private crypto currencies in India and encouraging the use of Distributed Ledger Technology, as announced in the Budget 2018-19.”

It’s crucial to note the phrasing used in the public release here.

Enforcing a legal framework to ban the “use” of cryptocurrencies could extend to trading and its application as a payment instrument but not necessarily owning cryptocurrencies.

As domestic industry source CryptoKanoon, which has been following the entire saga, reports:

Crypto Kanoon@cryptokanoon

Mr. Garg briefed FSDC Council on:

“..deliberations in the High-level Committee to devise an appropriate legal framework to ban use ofprivate crypto currenciesin India”

Does the abovesaid indicate that the possession and trading of Crypto are going to be permitted?

The domestic cryptocurrency trading has already been largely nullified as a result of the banking ban enforced by the central bank in April, leading to the shuttering of at least one major Indian exchange recently.

This story is developing…

 

This post credited to ccn  Image source: CCN