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HDFC bank blocks all its cards to buy or trade in cryptocurrencies

Press Trust of India/Mumbai 13 Mar 18 | 09:10 PM

Following the regulatory discomfort on cryptocurrencies, second largest private sector lender HDFC Bank today blocked its cards from being used to purchase/trade in such instruments.

"We have decided to not permit use of HDFC Bank credit, debit and prepaid cards towards purchase or trading of bitcoins, cryptocurrencies and virtual currencies, on merchants suspected to be dealing in crypto-currency or online foreign exchange trading or both," the bank said.

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In the communique to its customers, the bank said there are "increasing global apprehensions" regarding such instruments and the Reserve Bank has also cautioned regarding the potential economic, operational, legal and security related risks associated in dealing with such currencies.

The move comes after multiple warnings by the RBI and the finance ministry on the non-fiat virtual currencies.

Earlier this year, banks had reportedly stopped or delayed processing deposits and withdrawals in dedicated bitcoin exchanges.

Finance Minister Arun Jaitely's had on February 1 made the government position very clear in the Budget speech, wherein he had said such instruments were illegal and promised action to eliminate their use.

"Government does not consider crypto-currencies legal tender or coins and will take all measures to eliminate the use of these crypto-assets in financing illegitimate activities or as part of the payment system," he had said.

However, the bitcoin exchanges had reacted to it saying it is "business as usual" even after the statement and said Jaitely's comments were being misinterpreted.

"There is no change in the government stance with respect to trading cryptocurrencies. Cryptocurrency holders need not panic and the business is as usual," chief executive and co-founder of Unocoin Sathvik Vishwanath had said.

Another player Belfrics Global's chairman Praveenkumar Vijayakumar said government was taking time to understand the crypto world and the country' global share on cryptocurrency market was steadily increasing.

It can be noted that there has been huge volatility in the price of the bitcoin over the past few months, which surged to a very high level before crashing down. The bitcoins are "mined" using complex algorithms.

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