Cryptocurrency in India: Beginning of the End?

India has effectively banned cryptocurrencies.

The Reserve Bank of India (RBI) recently mandated any financial institutions and banks that fall within its regulatory purview to terminate any association and service provision to individuals or businesses dealing with virtual currencies. In effect, investors in India will no longer be able to go through established financial institutions and transfer money from their bank accounts to their crypto wallets to invest in cryptocurrencies, moving with the intent to ultimately eliminate cryptocurrencies from the country’s investment space.

With the recent RBI announcement, India now joins a club of countries including China and Japan, who are all proactively working to regulate and highly restrict or ban market operations in cryptocurrency. The cryptocurrency market in India was approaching substantial size, with investor numbers reaching 5m and bitcoin investments in India approaching $2bn. The announcement by the central bank has, however, sent the price of cryptocurrencies like Bitcoin crashing by around 10-15% in local exchanges and resulted in elevated investor concern towards cryptocurrencies.