Bitcoin rebounds sharply as India's central bank clarifies it has not banned cryptocurrency trading

The Reserve Bank of India issued a notice on Monday (May 31) to clarify that cryptocurrency trading is allowed in India. This news has injected a shot in the arm to the cryptocurrency market, which has been hit hard by global regulation recently. Cryptocurrencies such as Bitcoin and Ethereum have risen sharply at the beginning of this week.
In its latest advisory, the Reserve Bank of India told banks not to use a 2018 central bank circular that prohibited banks from facilitating such transactions, but was later struck down by India’s Supreme Court, as a reason to hinder cryptocurrency trading.

The RBI said, "With effect from the date of the Supreme Court's judgment, the circular is no longer in force and therefore cannot be relied upon."
However, the RBI also pointed out that banks must continue to carry out other routine due diligence measures on these transactions.
The RBI announcement came after local media reported that several financial companies, including Indian credit card issuer giant SBI Cards & Payment Services Ltd. and the country’s largest private sector lender HDFC Bank, had warned customers not to trade cryptocurrencies. Indian authorities have repeatedly expressed concerns that crypto assets could be used for crimes such as money laundering and financing terrorism.
After the latest announcement from the Reserve Bank of India, Avinash Shekhar, co-CEO of ZebPay, India's oldest cryptocurrency exchange, said, "Investing in cryptocurrencies has always been 100% legal in India, and the new announcement from the Reserve Bank of India clearly confirms the right to trade with cryptocurrency companies." He added that the clarification will attract more Indian investors to buy virtual currencies.
Sumit Gupta, CEO and co-founder of cryptocurrency exchange CoinDCX, noted that the Reserve Bank of India and the country's banks' widespread concerns about money laundering through cryptocurrencies should help spur regulation to make the industry safer and stronger.

After a series of heavy losses in the past few weeks, major cryptocurrencies rebounded sharply at the beginning of this week. As of noon Beijing time on Tuesday, the price of Bitcoin has risen above the $37,000 mark, up more than 8% in the past 24 hours, and Ethereum has risen to $2,660, up more than 15% in the past 24 hours.