Zebpay, which is a big cryptocurrency exchange from India, has recently notified its users that it would not be able to let its users withdraw their tokens for INR if it did not have a supporting bank in a document titled “Prohibition on dealing in Virtual Currencies”.
RBI Prohibits Banks From Dealing With Cryptocurrencies In India
The whole problem arose because the RBI, an Indian regulation agency, has decided to stop financial banking sectors under its purview to deal with cryptos. They have to comply with the directive until July 5 and there is a further hearing scheduled to happen on July 20. This decision was taken in April but the banks had 90 days to comply, a date which will terminate on July 5.
This has caused a panic selling in India, as people are afraid that they might lose their money and the price of cryptos went down. Bitcoin was down 13.8% and Bitcoin Cash went down 17.5%. Litecoin, which was somewhat less popular, was down 5.34% and remained less affected by this news.
“India Will Be Tamed By Cryptocurrency Soon. This is a Fact”, Explains Unicoin’s VP
While many people are suffering heavy losses from this notice, some people, as Vishwanath Shastry, the vice president of Unocoin, explained that it is only a matter of time before things start to be normalized.
In a recent interview after the flash crash, the VP explained that the whole market would be affected after July 5 but that the people who could wait would not suffer losses as he believes that it is a fact that India will “be tamed” by cryptos.
After the hearing in July 20, one of three scenarios are to be expected: either the ban will be lifted (a scenario which specialists tend to say that is likely), the date of the decision will be postponed (second most likely scenario) or the ban will not be lifted at all (less likely scenario).
Even in the case that the ban is not lifted by the RBI right now, there is still a chance of this happening in the future.
Investors from outside of India have been known to buy BTC there during the flash crash, as the prices around the world were not as affected as there.