Indian Crypto Investor Confused, ICICI Bank Forbids But Supreme Court Allows

Cryptocurrency trading in India has a thorny problem. (photo; Ewan Kennedy/unsplash)

JAKARTA - India's stance on crypto adoption has been a gray area since the birth of Bitcoin (BTC). This comes as a blow to the Indian crypto community. One of the largest financial services, ICICI Bank, has warned users not to use their remittance service to transfer any form of crypto or digital currency.

In ICICI's latest iteration of the Retail Output Remittance Application form, the bank has clearly stated its intention to discontinue users of the service for crypto transfers. Under the Foreign Exchange Management Act (FEMA) 1999, the declaration states:

“The money transfer above is NOT for investing/purchasing Bitcoin/Cryptocurrency/Virtual Currencies (such as Ethereum, Ripple, Litecoin, Dash, Peercoin, Dogecoin, Primecoin, Chinacoin, Ven, Bitcoin or any other virtual currency/cryptocurrency/bitcoin). ”

Major banking institutions have shared two more points reaffirming their anti-adoption stance, and warning users not to use their remittance services to invest in companies dealing in Bitcoin or other crypto and digital currencies.

Users are also warned not to send any funds that may have been obtained through cryptocurrency investments in the past. However, the Indian government has not shown any resistance to blockchain-based financial applications.

ICICI's move to use FEMA 1999 against crypto adoption has been consistent with other banking players in the country since the Reserve Bank of India (RBI) announced to ban banks from doing business with crypto-related companies in April 2018.

Contrary to ICICI's recent move to ignore crypto enthusiasts, India's Supreme Court has challenged the RBI's ban on crypto-friendly banks. As a result of this confusion, Indian crypto investors continue to find loopholes in the system to grow their crypto portfolios.

At the other end of the spectrum, India's largest cryptocurrency exchange, Binance's WazirX, continues to see an increase in trading volume and new users, due to RBI's clarification of the removal of the ban based on the Supreme Court ruling.