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Crypto Currencies Get A Set Bank In India And Pakistan Due To Government Crack Down

Crypto Currencies Get A Set Bank In India And Pakistan Due To Government Crack Down
The prices of crypto currencies - including bitcoin, in Indian exchanges was slashed dramatically after the country’s central bank banned the country’s banks from retaining any relation or links with dealers of crypto currencies.
Crypto currencies were also announced not to be legal in Pakistan by the country’s central bank in a separate statement late on Friday. According to a direction issued by the State Bank of Pakistan, all customers looking to use banks for crypto currency transactions should be refused straight away. People who attempt to use crypto currencies to take out funds out of the country would be liable to be prosecuted, said the central bank of Pakistan. 
India had earlier in the year announced that crypto currency dealings in the country would be illegal and had said that it was committed to stop the use of digital currency and its central bank had also earlier warned citizens over crypto currencies.
“Entities under its regulation may not deal in any virtual currency”, the Reserve Bank of India has most recently announced.
Crypto currency exchange Coinome said that after the announcement from the RBI, the local price of bitcoin in India dropped to 350,000 rupees or $5,392 compared to an international price of $6,617.
Vishal Gupta, co-founder of the Block Chain and Cryptocurrency Committee, an industry body, said that compared to the international price for bitcoin, bitcoin was trading at a 5 per cent premium before the announcement of the RBI. He further noted that the crypto currency is now being traded at a heavy 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 altogether."
Any of the regulated entities that have been dealing or allowing dealings in virtual currencies would be required to sever all links with them within a period of three months, said the BRI through a detailed circular issued by it late of Thursday evening.
Crypto currencies were earlier linked to "Ponzi schemes" that promise customers of abnormally high rates of returns to early investors by the Indian government.
In order to oversee unregulated exchanges of cryptocurrencies, formation of a regulator is being planned by the Indian government and it has also already set up a panel to look into crypto currencies.
There were concerns raised about the mode of exit of people who already are invested in cryptocurrencies following the announcement by the RBI on Thursday,
In India, there are about 4 to 5 million people who have some form of crypto-currency and abo0ut 60 per cent of them had set foot in the crypto market between October and December when the price of crypto currencies were at their highest, said Gupta from the Block Chain and Cryptocurrency Committee.
"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."

Christopher J. Mitchell

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