Citibank India Bans Purchase of Cryptocurrencies

While some countries government decided not to enter the cryptocurrency regulations at all, India doesn’t seem to let it go that easily.
The country’s government said that they are planning definite regulation of cryptocurrencies and digital assets. Indian banks also seem not to like it that much.

The last bank that has shown its teeth was Citibank India. In the letter to its customers they wrote that “given concerns, both globally and locally, including from the Reserve Bank of India, cautioning members of the public regarding the potential economic, financial, operational, legal, customer protection, and security-related risks associated in dealing with bitcoins, cryptocurrencies, and virtual currencies, they decided to not permit usage of its credit and debit cards towards purchase or trading of such bitcoins, cryptocurrencies and virtual currencies.”

At the beginning of the year, financial minister of India Finance Minister Arun Jaitley had spoken about a ban on crypto currencies in his Budget and said that the government “does not consider cryptocurrencies legal tender or coin and will take all measures to eliminate use of these cryptoassets in financing illegitimate activities or as part of the payment system.”

However he added that “the government is examining the matter. A Committee under the chairmanship of the Economic Affairs Department Secretary is deliberating over all issues related to cryptocurrencies to propose specific actions to be taken. Instead of taking any knee-jerk action, let’s wait for the report of this committee.

In the US, Citibank has already forbidden customers from borrowing money on credit cards for buying cryptos. Also, JP Morgan Chase, Bank of America and Lloyds Banking Group, have also forbade cryptocurrency purchase for their customers. Recently, Visa pulled its European support for crypto, and Mastercard has elected to treat crypto purchases as cash advances.

It definitely will be interesting to see how other lenders in both the India and the rest of the world, will proceed.

Teuta Franjkovic

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