Bitcoin may not yet be totally out of the woods in India, following the bank account closure of one exchange and the questioning of another.
As of May 20, BTCXIndia will be forced to close its doors after its bank account was canceled. Its bank informed the exchange that it will no longer be serving bitcoin businesses. It is looking into the possibility of working with other banks, but it is worried that the “general policy” toward Bitcoin in the country may not be accommodating.
Bitcoin in India got a bit of a scare in 2013 when the Reserve Bank of India (RBI) warned about virtual currencies. Another Indian exchange, Unocoin, had actually temporarily closed its doors as a precautionary measure. It later reopened after it was deemed that with adequate business practices, it would not face a regulatory crackdown. Last summer, Barry Silbert’s SecondMarket invested $250,000 for the exchange, expressing hope for the state of Bitcoin in the country.
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Late last year, RBI Governor Raghuram Rajan even hinted at the Bank’s adoption of digital currency in the distant future as part of remarks on how the country was moving towards a cashless society.
Recently however, Unocoin told Bitcoin Magazine that it was questioned by local authorities, who alleged that its activities were illegal in the country.
Unocoin CEO Sathvik Vishwanath did not disclose the name of the government agency. He suggested that the questioning arose from the lack of regulatory clarity, which was an issue in several countries.