Banks Will Not Allow You To Buy Bitcoins

Cryptocurrencies have taken off in recent times. The whole World seems to be chasing cryptocurrencies and this craze has even touched India. The belief is Cryptocurrencies can make you rich. The most popular cryptocurrency going around is the Bitcoin.

Bitcoins are a digital currency created by Bitcoin miners. Miners use special software to solve very complex mathematical problems. Miners are given Bitcoins in exchange. Miners keep the Bitcoin network safe and secure.

The Finance Minister Arun Jaitley has clarified that Bitcoins are not legal tender in India. RBI has banned banks/mobile wallets from dealing or providing services to any individual/business entities, who are in the business of buying and selling crypto currencies like Bitcoins.

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Banks Will Not Allow You To Buy Bitcoins

A number of our citizens have been purchasing Bitcoins. According to the Income Tax Department, more than 3.5 Billion Dollars worth of transactions in cryptocurrencies, were conducted in India over a 17-month period.

Tax evaders and money launders used Bitcoins, to hide black money. Many citizens fell for Bitcoins, just like any get-rich-quick scheme. Many tech-savvy youth, real estate players and jewelers invested in Bitcoins and other cryptocurrencies, to evade taxes or make some quick money.

SEE ALSO: Why Bitcoins Are Bad For India?

1. Why Bitcoins are bad?

• Bitcoins are not regulated by any Central Bank like the RBI or the US Federal Reserve Bank.
• Bitcoins do not enjoy the stability of a currency like US Dollar, Euro, Rupee or the Yen.
• If you deposit your money with the bank, the DICGC (Deposit Insurance and Credit Guarantee Corporation of India), guarantees your deposit up to Rs 1 Lakh per depositor per bank. Bitcoins give you no such guarantees and you can lose the entire investment.
• Mutual funds and Stocks are regulated by SEBI, the capital market regulator. IRDA regulates the insurance sector. PFRDA regulates pension funds. Bitcoins and Cryptocurrencies have no regulator. If you lose your money, there's no one to complain to.
• Bitcoins are not backed by any precious metal like gold. Bitcoins have no inherent value. Bitcoins are all about speculation.
• Bitcoins can be manipulated just like any Ponzi Scheme. Simply speaking, manipulation and speculation is driving prices up in cryptocurrencies.

SEE ALSO: Why Bitcoins Are Dangerous For You?

2. Banks Will Not Allow You To Buy Bitcoins

You can no longer buy cryptocurrencies through banks and mobile wallets. RBI has banned banks/mobile wallets from dealing with or providing services to individuals/business entities, who are into buying and selling cryptocurrencies.

If you are trading in Bitcoins or any cryptocurrency, you are in a deep mess. You cannot transfer money from the bank account, to the crypto-trading wallet.

Yes….you cannot transfer money from the savings bank account to your cryptowallet. Banks in recent times have also banned their customers from buying/selling cryptocurrencies. RBI has also warned banks to thoroughly scrutinize, financial transaction by Companies and exchanges involved in the trading of cryptocurrencies.

Citi Bank, Yes Bank and some other banks have sent emails to their customers asking them not to purchase cryptocurrencies using credit cards, debit cards, digital wallet, prepaid cards and travel cards. Be Wise, Get Rich.