SBI Credit Card Bans CryptoCurrency and Virtual Currency Purchases

SBI Cards & Payments Services Pvt. Ltd, the second largest issuer of credit cards in India, has warned customers of the risks associated with cryptocurrencies. Despite the warning, the company did not move to ban its customers from purchasing bitcoin and other virtual currencies using SBI issued credit cards. 

Recently SBI Cards sent an email notification to all credit card holders citing the ban on purchasing of cryptocurrency and virtual currencies. Day by day more and more financial firms are blocking the ability to purchase or deal with virtual or cryptocurrencies. Regulated financial institutions in India can no longer provide services to companies or individuals dealing with virtual currencies, the Reserve Bank of India says.

The statement comes as other regulators around the world are grappling with how to regulate digital assets like bitcoin.

It went as:

Dear SBI Cardholder,

This is with reference to the RBI’s communication vide its ‘Statement on Developmental and Regulatory Policies’ dated 5 April 2018.

As per RBI, there are increasing concerns about consumer protection, market integrity, money laundering etc. caused by Virtual Currencies (VCs), also referred as cryptocurrencies and crypto assets. Hence, it has announced that with immediate effect, entities regulated by RBI shall not deal with or provide services to any individual or business entities dealing with or settling Virtual Currencies.

To ensure the security of our customers and adhering to the RBI policies, SBI Card will not allow the purchase or trading of such cryptocurrency or any other virtual currency.
For any query or details, you can call our helpline number at 18601801290 or 39020202 (prefix local STD code).

Assuring you the best of our services.
Warm Regards,
SBI Card.

In India, it seems that the Government, RBI, and associated stakeholders don’t see cryptocurrencies as beneficial to them.

However, The Reserve Bank of India was more open to the blockchain, the technology that underpins virtual currencies, and says in the statement that it has the potential to improve the financial system.

Though do note that, No, India hasn’t banned cryptocurrencies. People can still buy, sell or trade bitcoins or any virtual currency, by any other means of payment.

RBI is a banking regulatory body and controls the monetary policies of India, but it is not a legislative body. It can set directive regulations for the bodies that come under its defined authority, but cannot control or penalize other businesses or individuals.

A law to ban the use or trade of cryptocurrencies in India has to come from either the elected governments (whether central or state) or the judiciary (Supreme Court of India or the State High Courts).

Hence its the financial institution who might set the rules or conditions about the use their services.

Hence SBI Card has said that it won’t allow the purchase or trading of such cryptocurrency or any other virtual currency.

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