In what is being described a knee jerk reaction by many, the Reserve Bank of India or RBI has said it will stop the trade of cryptocurrencies by the institutions governed by it. The RBI has given banks a time-frame of three months to implement the decision and said it was taking the step to ring-fence banks."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 cryptocurrency is a digital asset designed to work as a medium of exchange that uses cryptography to secure its transactions. Cryptocurrencies usually function on block chain technology, with the most popular example being bitcoins.While some welcomed the RBI's move, others stressed on the need for more regulation rather than a ban.