Fri. Mar 29th, 2024

A few days after Citibank announced banning the use of its debit and cards for buying cryptocurrency, SBI too has come u with a similar course of action. SBI Card stated that it is in talks with Visa and Mastercard in order to ban such transactions. The CEO of SBI Card Mr. Hardayal Prasad said that taking into consideration the concerns of RBI and the government related to cryptocurrency, the bank is working on removing the usage of cards for doing transactions involving cryptocurrency. Citibank also sent out an email notification to its customers stating the ban on usage of its cards to buy virtual currencies due to the concerns of the RBI.

In January, the Reserve Bank of India warned all the banks about the exchanges involved in trading of bitcoins and other digital tenders. The decision of the Apex Bank to declare these transactions illegal is awaited. The Central Bank has also asked the other banks to understand the working of these currencies before actually dealing with these companies. The RBI has also issued some notifications in order to warn the stakeholders about the risks associated with these virtual currencies. In his budget speech of 2018, the finance minister Arun Jaitley said that the cryptocurrencies or coins are considered legal by the government and to remove the use of these assets in the payment system. However, these cryptocurrencies were also not declared to be illegal by Arun Jaitley which is why cryptocurrencies still continue being present.

On a global level, other banks and financial institutions are taking precautionary measures to avoid volatility associated with cryptocurrencies. Citigroup and other banks including the Bank of America and JP Morgan Chase have blocked all the purchases involving cryptocurrency via credit cards because of the credit risk that is associated with it in the US. In the UK, Llyod Bank has prohibited customers from buying bitcoins with credit cards.

By saumya