fbpx
Money

India, Pakistan Central Banks Clamp Down On Crypto-Currencies

India’s central bank barred banks on Friday from having any links to virtual currency dealers, slashing the prices of bitcoin and other crypto-currencies on local exchanges.

Pakistan’s central bank said in a separate statement late on Friday that crypto-currencies were not legal in the country.

The State Bank of Pakistan told banks and other financial services providers to refuse customers seeking crypto-currency transactions.

It noted that those using crypto-currencies to transfer funds outside Pakistan could be prosecuted.

India’s government and the Reserve Bank of India (RBI) have previously cautioned the public over crypto-currencies, with New Delhi vowing earlier this year to eliminate the use of digital currency, which it considers illegal.

The RBI said on Thursday that entities under its regulation may not deal in any virtual currency.

The price of bitcoin plummeted to a low of 350,000 rupees ($5,392) versus its international market price of $6,617, following the RBI announcement, crypto-currency exchange Coinome said.

Bitcoin was trading before the announcement at a 5 percent premium to the overseas price, said Vishal Gupta, co-founder of the Block Chain and Cryptocurrency Committee, an industry body, noting it is now trading at a significant discount.

“This seems to be a very aggressive move,” said technology law expert Namita Viswanath, a principal associate at IndusLaw.

“Instead of the RBI taking a holistic approach and seeing how to curb potential misuse, it seems to be a rather broad-stroke approach of completely prohibiting this all together.”

Late on Friday the RBI issued a more detailed circular stating any regulated entities that already provide virtual currency dealing services will have to cut all ties within three months.

The Indian government has previously likened crypto-currency investments to “Ponzi schemes” that offer unusually high returns to early investors.

It has set up a panel to investigate crypto-currencies and plans to appoint a regulator to oversee unregulated exchanges.

Thursday’s announcement raised concerns about the exit options for investors who currently hold crypto-currencies.

The Block Chain and Cryptocurrency Committee’s Gupta estimated that at least 4 to 5 million people in India hold some kind of crypto-currency and that 60 percent of them entered the market between October and December, when prices were at a peak.

“Most of these people are already sitting on capital losses,” he said. “Now the asset has become dead. You can’t transact with it. If you transact with it, your bank accounts are going to be shut.”

($1 = 64.9100 Indian rupees)

This story originally appeared in Reuters.

Join The Discussion

Trump's Plan To End Shutdown Falls Flat
Trump’s Plan To End Shutdown Falls Flat [Video]
World's 26 Richest People Own As Much As Poorest 50%
World’s 26 Richest People Own As Much As Poorest 50%
Thailand Signals Shift In Refugee Policy After Rahaf Mohammed
Thailand Signals Shift In Refugee Policy After Rahaf Mohammed [Video]
Brexit Plans In Chaos After UK Parliament Rejects Proposal
Brexit Plans In Chaos After UK Parliament Rejects Proposal [Video]
How To Buy Bitcoin Anonymously
How To Buy Bitcoin Anonymously
Number Of Bitcoin ATMs Hits 4,000 Globally
Bitcoin ATMs Hits 4,000 Globally-Why Is It Growing So Fast?
Is Bitcoin Building Support Above $3,500
Is Bitcoin Building Support Above $3,500?
Belarus Allows Traders To Buy Shares With Bitcoin
Belarus Allows Traders To Buy Shares With Bitcoin
The Future Of Online Shopping
The Future Of Online Shopping
10 Marketing Trends To Watch In 2019
10 Marketing Trends To Watch In 2019
40+ Video Marketing Statistics For 2019
40+ Video Marketing Statistics For 2019 [Infographic]
Emerging Email Marketing Trends To Survive 2019 And Beyond
Emerging Email Marketing Trends To Survive 2019 And Beyond [Infographic]
The Latest Social Media Automation Rules In 2019
The Latest Social Media Automation Rules In 2019
4 Tips To Help You With The Constant Changes In Social Media
4 Tips To Help You With The Constant Changes In Social Media
Instagram's Testing Side-Scrolling Feed View, Similar To Stories
Instagram’s Testing Side-Scrolling Feed View, Similar To Stories
The 10 Best Instagram Tools For 2019
The 10 Best Instagram Tools For 2019
What Is Your Therapist Listening For
What Is Your Therapist Listening For?
Wish You Were Smarter
Wish You Were Smarter? These 4 Brain Hacks Can Help You Get There
Weightlifting Less Than An Hour Per Week Could Increase Your Longevity
Weightlifting Less Than An Hour Per Week Could Increase Your Longevity
Your Environment May Affect Your Eyes More Than You Realize
Your Environment May Affect Your Eyes More Than You Realize
Trump's Plan To End Shutdown Falls Flat
Trump’s Plan To End Shutdown Falls Flat [Video]
Thailand Signals Shift In Refugee Policy After Rahaf Mohammed
Thailand Signals Shift In Refugee Policy After Rahaf Mohammed [Video]
Brexit Plans In Chaos After UK Parliament Rejects Proposal
Brexit Plans In Chaos After UK Parliament Rejects Proposal [Video]
Coming To Canada 'Worth The Risk,' Says Saudi Teen Refugee
Coming To Canada ‘Worth The Risk,’ Says Saudi Teen Refugee [Video]