Reserve Bank of India (#RBI) barred banks from dealing in cryptocurrencies.!

Reserve Bank of India (RBI) barred banks from dealing in cryptocurrencies.
The regulator said it will give entities three months to unwind their business relationships. “In view of the associated risks, it has been decided that, with immediate effect, entities regulated by RBI shall not deal with or provide services to any individual or business entities dealing with or settling VCs (virtual currencies),” the central bank had said on Thursday. “Regulated entities which already provide such services shall exit the relationship within a specified time.”
Industry insiders said that many investors had also reached out to the income tax department and are now planning to define their gains or losses from such currencies as speculative business income.
Some investors are also looking to set off gains from virtual currencies against losses on other speculative businesses, said people in the know.
“Such speculative loss from Bitcoin or any other cryptocurrency cannot be adjusted against non-speculative income but can be adjusted against gains in other speculative assets,” said Maheshwari. “Traders won’t be able to set off their losses against profits from other assets since there is a possibility that the trades can be declared illegal as it was never the intention to allow them in the first place.”
The I-T department had earlier issued about 500,000 notices to Bitcoin and other cryptocurrency investors and sought answers to 28 questions.
In several cases, investors have also booked losses after trading in cryptocurrencies. These investors are looking to set off losses against other speculative income such as that from grey market commodity trading or income from unknown sources.
Bitcoin was trading at $6,613 on Friday, according to the Coin-Desk Bitcoin Price Index. Prices have crashed by about 49% in the past month and many Bitcoin experts expect them to drop further in the coming weeks. Before Friday’s announcement, the Indian government and the RBI have issued several warnings against dealing in cryptocurrencies including bitcoins.

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