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Cryptocurrencies: RBI clarifies on 2018 circular, asks banks to carry out customer due diligence

(Asian News Hub) – The Reserve Bank of India (RBI) on May 31 clarified that banks and other regulated entities cannot cite its 2018 circular on cryptocurrencies as it has been set aside by the Supreme Court (SC) in in March, 2020.

The circular is not valid from the date of the SC order and cannot be cited or quoted from, the RBI said.

However, the central bank asked banks to carry out the necessary customer due diligence process in line with regulations governing standards for Know Your Customer (KYC), Anti-Money Laundering (AML), Combating of Financing of Terrorism (CFT) and obligations of regulated entities under Prevention of Money Laundering Act, (PMLA), 2002.

Also, banks need to ensure compliance with relevant provisions under Foreign Exchange Management Act (FEMA) for overseas remittances, the RBI said.

The RBI circular, called Customer Due Diligence for transactions in Virtual Currencies (VC),  came shortly after major Indian banks have started warning customers against using their services to trade in cryptocurrencies.

The RBI said it has observed that certain banks/ regulated entities have cautioned their customers against dealing in virtual currencies by making a reference to its 2018 circular.

“Such references to the above circular by banks/ regulated entities are not in order as this circular was set aside by the Hon’ble Supreme Court on March 04, 2020 in the matter of Writ Petition (Civil) No.528 of 2018 (Internet and Mobile Association of India v. Reserve Bank of India),” the RBI said.

“As such, in view of the order of the Hon’ble Supreme Court, the circular is no longer valid from the date of the Supreme Court judgement, and therefore cannot be cited or quoted from,” the RBI said.

Earlier, in an email to customers, banks, including HDFC Bank and State Bank of India, have said that users who deal in virtual currencies may face account suspension citing a 2018 circular from the Reserve Bank of India. Notably, the circular was struck down by the Supreme Court in March 2020.

Cryptocurrency is decentralised digital money, which works based on blockchain technology. Bitcoin and Ethereum are the popular crypto currencies but there are thousands of cryptocurrencies in circulation.

Even as the RBI and the Government have not formed an opinion on the cryptocurrencies, there are many Indians who have taken exposure in crypto market. 

According to data from crypto exchanges, there are approximately 1.5 crore Indians who have invested in cryptocurrencies holding Rs 15,000 crore.

There are 350 startups who operate in blockchain and crypto. Crypto exchanges, WazirX, CoinSwitch Kuber and other exchanges, have seen a big rush in demand from users and crypto exchanges are advertising heavily on investments.

On March  25, speaking at the 7th edition of India Economic Conclave, the RBI Governor, Shaktikanta Das had said the central bank has flagged some major concerns to the Government about crypto currencies.

“Both RBI and the government are committed to financial stability. We have flagged some major concerns to the government on crypto currencies. The government will come out with a decision sooner than later,” Das had said.While the RBI is clearly not comfortable with the idea of cryptocurrency as a medium of exchange, the government’s stance on this issue is  not clear.

The government has proposed to present a Bill to regulate cryptocurrencies called The Cryptocurrency and Regulation of Official digital currency Bill, 2021.

The Bill has provisions to make any dealings in cryptocurrency illegal. But there is no clarity yet on when this Bill will be introduced in Parliament.

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Bitcoin to get major facelift after four years in November

The upgrade would take about five months as it requires a lot of testing before being fully integrated into the system.

(Asian News Hub) – Bitcoin’s new upgrade ‘Taproot’ has received overwhelming support from miners around the world and is set to take effect from November, CNBC reported.

The new upgrade would mean greater transaction privacy and efficiency which would enable smart contracts, a feature of the blockchain technology which eliminates the need for middlemen.

Taproot is the first and the most anticipated update since the last one ‘Segregated Witness (SegWit)’ in 2017. While the main focus of SegWit was scaling the Bitcoin protocol, Taproot will equip Bitcoin with a new signature scheme known as Schnorr signatures.

Currently, Bitcoin uses the “Elliptic Curve Digital Signature Algorithm,” which is created from the private key that secures the Bitcoin wallet and ensures that it is only used by its owner.

On the other hand, Taproot will switch to Schnorr signatures which is multi-signature transactions unreadable, the report said citing Alejandro De La Torre, Vice President at Hong Kong-headquartered major mining pool Poolin.

“You can kind of hide who you are a little bit better, which is good,”  Brandon Arvanaghi, previously a security engineer at crypto exchange Gemini told the publication.

This would allow greater anonymity for an individual bitcoin address on the public blockchain, but it will make simple transactions indistinguishable from those that are more complex and comprised of multiple signatures, the report added.

The new upgrade will also allow smart contracts cheaper along with taking up lesser space on the blockchain.

“The most important thing for Taproot is…smart contracts,” said Fred Thiel, CEO of cryptocurrency mining specialist Marathon Digital Holdings.

“It’s already the primary driver of innovation on the ethereum network. Smart contracts essentially give you the opportunity to really build applications and businesses on the blockchain.”

The upgrade would take about five months as it requires a lot of testing before being fully integrated into the system.

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Gondola service resumes partially in Gulmarg

Services resumed on trial basis, situation being monitored closely: Dir Tourism Itoo

Jahangir Sofi

(Asian News Hub) – With the graph of Covid-19 positive cases in the valley showing the decreasing trend, the Tourism department Kashmir, has partially resumed the Gulmarg Gondola service on trial basis.

Director Tourism Kashmir, Dr. G. N. Itoo said that the Gondola services have been partially resumed as the Covid situation is evolving which is being monitored closely.

“The Gondola services will be limited only as it has been started on a trial basis. If there are more modalities to be discussed with respect to Covid situation that will be also taken care of,” Itoo said.

“We are ensuring everything is being taken care of from our side, and whenever the Government takes a call, we should be ready to welcome tourists,” he said.

After the tourism was opened in June 2020, the tourism arrival in the valley had gained a reasonably good momentum and the hoteliers and houseboat owners had pre bookings till May end of this year.

However, with the onset of the second wave of Covid-19 which also engulfed the valley along with the other parts of the country, a complete Corona lockdown was imposed in Jammu and Kashmir, resulting in the cancellation of the all the pre bookings giving a deserted look to hotels and houseboats in the valley.

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Cryptocurrencies: Elon Musk Changes Twitter DP to ‘Triggered’ Crypto Woman

(Asian News Hub) – Elon Musk has changed his Twitter display picture (DP), otherwise known as a profile photo, a character from a Japanese site wearing a Bitcoin dress and posed on the foreground of a $BTC logo.

The character has “Triggered” eyes. Currently, there are no explanations as to why the CEO did it. Still, speculations point out to Musk targeting Bitcoin fans that blame his tweets for the leading cryptocurrency plummet.

Musk’s Tweets Causes Bitcoin Drop

Recently, Bitcoin has dropped in market price and performance despite seeing a rise in its trends, particularly as it is on the road to recovery, following the drastic changes it suffered in the past months. The drop in performance of the leading cryptocurrency was due to Elon Musk’s tweet about it, saying that Tesla has dropped Bitcoin use due to coal energy dependence.

Tesla is known to be a clean energy company, and that Musk is also an advocate for the environment, so dropping Bitcoin was a way to adhere to their beliefs and not something personal against Bitcoin. However, recent developments have pushed Bitcoin purists to think of Musk as the villain, especially with his increased support for Dogecoin.

What Does This Mean?

Musk is always fond of trolling people on the internet, and doing things without explanation even though people would either go crazy about it or have them develop theories as to his next move. However, one speculation is that the CEO was about the “triggered” Bitcoin fans who were affected by the price drop in the market, as brought by his latest tweet.

The CEO did not mean for the prices to go down, but his meme photo tweet still had a massive effect on the cryptocurrency, and in doing so, has triggered the downfall of Bitcoin in the market today.

Currently, Wazirx still lists Bitcoin as the top and leading cryptocurrency, with a $37,500 market price and a 4.33 percent downward trend in the past 24 hours.

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