Cryptocurrency traders and investors in India have been among the recent losses in the increasing trend of closing personal accounts in global banking.

The Indian Parliament is currently considering a nationwide ban on cryptocurrency, which is what local industry critics, such as former Coinbase CEO Balaji Srinivasan, have compared to a “five-year internet ban.”

The Economic Times reports that clients of private banks in India such as HDFC, HSBC and Citi have received letters this year asking them to clarify transactions related to cryptocurrencies and often asking them to visit a local bank branch in person. If this clarification is not received, the accounts may be banned or banned. One message to affected buyer says:

“Policy advises banks to exercise caution by carefully reviewing transactions in the account to alert users, holders and dealers of virtual currencies, including Bitcoin, of the risks.”
In 2020, India’s Supreme Court overturned a ruling by the Reserve Bank of India requiring banks to stop providing services to cryptocurrency traders.

The Indian parliament is expected to pass a new bill that would restrict the economic activity of traders, and prominent representatives of the Indian cryptocurrency community have spoken against it. Satwick Vishwanath, chief executive of India’s Onquin Exchange, believes there is a need to move in the opposite direction to spur the growth of the fintech space in his country. “With cryptocurrencies by their side, any country can serve a large population without a bank,” he said.

Banks are also shutting down proactive customer accounts that are believed to be linked to funds entering or leaving cryptocurrency exchanges in a number of countries.

On February 5, the Central Bank of Nigeria banned financial institutions operating in the country from “facilitating payments for cryptocurrency exchanges,” resulting in the immediate closure of bank accounts linked to and behind exchanges.

In the UK, HSBC recently stopped accepting transfers from cryptocurrency exchanges altogether. Podcast expert Peter McCormack revealed in a February 22 tweet that Lloyds Bank, a UK retail and commercial bank, had tried to distance itself from cryptocurrency dealers. However, it could be a self-inflicted wound.

A longtime British investor who wished to remain anonymous told Cointelegraph that major banks across Europe are increasingly alienating themselves from cryptocurrency traders. He said banks were rejecting the new accounts based on their commitment to the cryptocurrency.

“I wanted to open a new bank publicly and stay ahead of it,” he says. “But I met a brick wall.” The investor claims to have passed the “six sums” through HSBC “without issuing”, but the old accounts are treated differently from the new accounts.

“If you don’t talk about it and you’re already in it, it works fine. But if you ask, it’s not.”

Source: CoinTelegraph