New Delhi: The Reserve Bank of India, in a recent decision, has said that it will put a ban on the trade of crypto currencies by the institutions governed by it. The banks have been issued by the authority a time-frame of three months to get the decision implemented and commented that the decision was in the interest of banks to ring-fence them.

“RBI regulated institutions are required to stop having business relations with the entities dealing in virtual currencies forthwith and unwind the existing relation in three months,” RBI Deputy Governor B P Kanungo said.

A crypto currency is digital mode asset which operates to work as a medium of exchange by using the technology of cryptography to secure its transactions. The technology of Crypto currencies usually functions on block chain technology. The most popular one among them is bit coins.

While the move was welcomed by some, others pressed for a need for more regulation rather than a ban.

“You have countries in Europe that have regulated crypto currency and these regulations ensure there is no money laundering and Ponzi schemes. What you need to do is regulate and not ban,” senior lawyer in the Bombay High Court, Sujay Kantawala told News Reporters.

Mukul Shrivastava, Partner, Fraud Investigation & Dispute Services at Ernst & Young said, “The last couple of months has seen Investments in crypto currency more as a ‘herd mentality’ – it was almost a bubble waiting to burst.”

However, the RBI has kept an option open for digital currencies in the country as of now.

In the statement on developmental and regulatory policies issued by the Reserve Bank of India said, “Rapid changes in the landscape of the payments industry along with factors such as the emergence of private digital tokens and the rising costs of managing fiat/paper/metallic money have led central banks around the world to explore the option of introducing fiat digital currencies.”

“While many central banks are still engaged in the debate, an inter-departmental group has been constituted by the RBI to study and provide guidance on the desirability and feasibility to introduce a central bank digital currency. The report will be submitted by end June,” it said.

The people who have put their investments in crypto currencies are disappointed with the Authority taking step to ban crypto currencies al together.

“I feel it’s a sad idea because many countries are going ahead with crypto currencies where it’s doing really well. So many people have invested in them and were earning at high levels,” says Zoheb a bit coin investor.

In yet another development, the RBI has also set to be mandatory for payment system operators to store data within the country.

You May Also Read: Chairman Venkaiah Naidu Corrects Rajya Sabha Records Over Anti-Corruption Bill