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India is not Chile, our ‘WAR’ with Banks is Different

In the last two days I received many articles on how Chile’s exchanges ‘won’ a fight with banks. The report says, Chile’s banks were ordered to re-open the bank accounts of cryptocurrency exchanges while the case goes into hearing. Technically the exchanges haven’t won the dispute yet, but its a small victory nonetheless.

Most Indian traders are comparing the case with the current situation in India. There are many similarities in both these situations, but there is one primary difference that sets both countries apart. We will get to that in a minute.

Similarities in the situation in both countries

  • Banks are shutting down accounts of Crypto exchanges in both India and Chile
  • The government has warned residents of the risk associated with cryptocurrencies
  • Some exchanges have gone to court against the banks that shut down the account
  • Both countries have no regulations in place for cryptocurrency trading

Differences between the Situation in both countries

  • The Chilean Central Bank did not order the banks to close their ties with Crypto exchanges. RBI on the other hand, did that in India.

The fundamental problem in Chile and why the court ruled against the bank, is that the banks took the action itself. Chile’s state bank Banco del Estado de Chile, Itau Corpbanca and many others abruptly closed the accounts of big exchanges like Buda, Orionx, and CrytpoMarket.

In India however, it was our regulatory authority, the reserve bank of India that passed this mandate in an official notification. Hence, the banks have no choice. You need to go against the RBI, which is tough. But the good news is that an exchange was successful in getting a court hearing against it as well.

Regulations are the need of the Hour

Exchange owners in both countries have expressed their interest in regulations. Exchanges in both countries are currently self regulating with KYC and AML policies. However, bigger exchanges in India are yet to make public their move to sway RBI’s decision. Exchanges like Koinex and coindelta are keeping their intentions confidential, but have assured Coin Crunch India that ‘People are working round the clock’ for the same.

Many speculate that the banks in Chile closed the accounts after an indirect order from the government, the same is being said for India as well. As the Chilean Central bank and the Superintendency of Banks and Financial Institutions (SBFI), remain silent on the issue, the exchanges have to only fight with individual banks. Which they are doing.

But the fight in India is against the behemoth we call the RBI, so every step needs to be carefully planned and executed.

Do you think the Indian exchanges are doing anything to fight RBI’s decision? Let us know in the comments below

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