**Policy Summary: RBI/2017-18/154; DBR.No.BP.BC.104/08.13.102/2017-18**
**Date:** April 6, 2018
**Subject:** Prohibition on Dealing in Virtual Currencies (VCs)
**Issuing Authority:** Reserve Bank of India (RBI)
**Addressees:** All Commercial and Cooperative Banks, Payments Banks, Small Finance Banks, Non-Banking Financial Companies (NBFCs), and Payment System Providers.
**Key Provisions:**
* In light of the risks associated with Virtual Currencies (VCs), including Bitcoins, entities regulated by the Reserve Bank of India are prohibited from dealing in VCs or providing services that facilitate dealing in or settling VCs.
* Prohibited services include maintaining accounts, registering, trading, settling, clearing, providing loans against virtual tokens, accepting VCs as collateral, opening accounts for exchanges dealing with VCs, and transferring/receiving money in accounts related to the purchase/sale of VCs.
* Regulated entities currently providing such services are required to terminate these relationships within three months from the date of this circular.
**Legal Basis:**
* The instructions are issued under the powers conferred by:
* Section 35A read with section 36(1)(a) of the Banking Regulation Act, 1949.
* Section 35A read with section 36(1)(a) and section 56 of the Banking Regulation Act, 1949.
* Section 45JA and 45L of the Reserve Bank of India Act, 1934.
* Section 10(2) read with Section 18 of the Payment and Settlement Systems Act, 2007.
**Contact:** Saurav Sinha, Chief General Manager-In-Charge.
Key Entities Referenced
Reserve Bank of India: The central bank of India, which issued the circular.
Virtual Currencies (VCs): Digital or virtual currencies, including Bitcoins, which are the subject of the prohibition.
Commercial Banks: Banks regulated by the Reserve Bank of India.
Cooperative Banks: Banks regulated by the Reserve Bank of India.
Payments Banks: Banks regulated by the Reserve Bank of India.
Small Finance Banks: Banks regulated by the Reserve Bank of India.
NBFCs: Non-Banking Financial Companies, regulated by the Reserve Bank of India.
Payment System Providers: Entities that provide payment system services and are regulated by the Reserve Bank of India.
RBI/2017-18/154
DBR.No.BP.BC.104 /08.13.102/2017-18 April 6, 2018
All Commercial and Co-operative Banks /Payments Banks/Small Finance Banks /
NBFCs / Payment System Providers
Madam / Dear Sir,
Prohibition on dealing in Virtual Currencies (VCs)
Reserve Bank has repeatedly through its public notices on December 24, 2013,
February 01, 2017 and December 05, 2017, cautioned users, holders and traders of
virtual currencies, including Bitcoins, regarding various risks associated in dealing with
such virtual currencies.
2. In view of the associated risks, it has been decided that, with immediate effect,
entities regulated by the Reserve Bank shall not deal in VCs or provide services for
facilitating any person or entity in dealing with or settling VCs. Such services include
maintaining accounts, registering, trading, settling, clearing, giving loans against virtual
tokens, accepting them as collateral, opening accounts of exchanges dealing with them
and transfer / receipt of money in accounts relating to purchase/ sale of VCs.
3. Regulated entities which already provide such services shall exit the relationship
within three months from the date of this circular.
4. These instructions are issued in exercise of powers conferred by section 35A read
with section 36(1)(a) of Banking Regulation Act, 1949, section 35A read with section
36(1)(a) and section 56 of the Banking Regulation Act, 1949, section 45JA and 45L ofthe Reserve Bank of India Act, 1934 and Section 10(2) read with Section 18 of Payment
and Settlement Systems Act, 2007.
Yours faithfully,
(Saurav Sinha)
Chief General Manager-In-Charge
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