The Supreme Court order to lift the RBI ban on crypto trading in India has paved the way for setting up of cryptocurrency-based banks in the country, where customers can maintain crypto savings accounts. Apart from getting interest on the cryptocurrency deposit, customers may also opt for rupee loans against crypto, where the cryptocurrency will act as collateral.
In case the banks start accepting cryptocurrencies, will the ban on crypto trading in India be lifted fully?
“There is no ban on crypto in India. There was a banking restriction, which has been quashed by the Supreme Court of India in March 2020,” said Nischal Shetty, CEO, WazirX.
In fact, London-based online cryptocurrency platform Cashaa has tied up with the United Multistate Credit Cooperative Society to provide savings accounts and loans to crypto investors in India.
Talking on the prospect of a crypto banking system in India, Shetty said, “We believe that in the next 6-12 months, crypto banking will become a reality. One of the major reasons behind is that banks across the globe are already jumping into providing crypto services. Especially in the US, JP Morgan already shares its intent about providing crypto services, PayPal a FinTech giant has announced its crypto service offerings, Square is already providing crypto services to their customers in the US.”
“Recently in Singapore, DBS bank announced their own crypto exchange. We believe that a couple of banks will start providing crypto services to its customers,” he said.
Expressing his views on – whether people in India will be able to take out a loan against cryptocurrencies, Shetty said, “One of the use cases of crypto as an asset class is to be used as collateral for loans. It is already happening in the DeFi ecosystem sector where anyone in the world including Indians can participate by using their crypto assets as collaterals to take loans.”
“We believe that it will also happen in the Indian banking sector where crypto will be considered as a collateral while taking loans. We also believe that there will be a few crypto startups focused on providing loans to Indians against crypto,” Shetty added.