After the Reserve Bank of India banned dealing in virtual currencies, more commonly known as cryptocurrencies, Bitcoin, one of the most traded cryptocurrency is up by as much as 44% from where it was 16 months ago immediately before the ban. On July 5, 2018, Bitcoin was at $6541.79 and today is at $9450.68. It is still much lower from its all-time high of $19498.63 which it touched on December 18th in 2017.
RBI imposed a blanket ban on dealing in cryptocurrency in its circular dated 6th April with a deadline of 5th July. RBI in its circular had stated that entities under its regulation shall not deal in virtual currencies, preventing banks from offering cryptocurrency. The banks were given three months to stop services being offered to individuals and businesses dealing in cryptocurrency.
The step was taken after the authorities observed that several companies had started dealing in cryptocurrency which does not have any intrinsic value thereby risking investor interests. The move ring-fenced the entities from risks of cryptocurrencies and has since released four warnings against Bitcoin and other cryptocurrencies.
In addition to RBI, the finance ministry too had stated that virtual currencies are not legal tender and have no protection of the government.
After the circular was issued by RBI, many cryptocurrencies exchanged wound up their business across country with one of the biggest currency exchange ZebPay asking its users to withdrawn their money before the RBI imposed a deadline.