4 min read.Updated: 16 Feb 2022, 06:34 AM ISTGaurav Sahay,Vinu Peter
Government has not differentiated between residents and non-residents
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Given the recent buzz around cryptocurrency, it is important to understand the trend or flow of events that have occurred recently. On 6 April 2018, the Reserve Bank of India (RBI) issued a notification cautioning all users, holders, and traders of cryptocurrencies, about risks associated to dealing with unregulated virtual currencies. It stated that all transactions involving virtual currency/ tokens will not be supported by the banking system, and bank accounts would be withdrawn from persons transacting in virtual currency. Subsequently, on 4 March 2020, the Supreme Court set aside the aforesaid RBI notification. Since banks were not permitting payments for cryptocurrencies using their system, the RBI subsequently issued a clarification on 31 May 2021, that since the aforesaid 2018 notification was set aside by the Supreme Court, there is no express prohibition on banks honouring cryptocurrency related transactions.