The quashing of RBI ban on cryptocurrency by the Supreme Court of India has bought cheers to the country’s crypto community. In the much-awaited hearing scheduled on Wednesday, the SC struck down the RBI ban on cryptocurrency trading. The court ordered that the Reserve Bank of India’s 2018 prohibition order related to digital currencies is illegal and allowed free trading of virtual currencies, including Bitcoin.
A three-judge Bench of Justice Rohinton Fali Nariman, Justice S Ravindra Bhat and Justice V Ramasubramanian allows the plea of the Internet and Mobile Association of India (IAMAI) challenging RBI’s 2018 circular that directed regulated entities to not deal with cryptocurrencies. https://t.co/BPl5JnZgYe
— ANI (@ANI) March 4, 2020
RBI ban on cryptocurrency lifted after an extensive legal fight
On 6th April 2018, India’s central bank issued a circular that put a blanket ban on any cryptocurrency dealing in India. The order mentioned that all the financial entities under RBI’s regulatory purview should not deal in virtual currencies, and neither shall they facilitate any other entity in cryptocurrency dealings. Moreover, all the entities or persons dealing in such assets and services were warned to close their operations within three months.
Before the 2018 ban, the RBI issued cautioned the cryptocurrency traders, owners, and dealers to refrain from such activities. Indians were warned about the risks associated with ital assets and their involvement in illicit activities.
Fortunately, the prohibitory order was challenged in the apex court by ‘The Internet and Mobile Association of India.’ The association, which represents numerous Indian crypto exchanges, argued that currently, no law specifically deals with cryptocurrency trading. Hence, it is an authentic business operation under the Indian Constitution. There are no legal definitions about crypto as yet, and they are, in a sense, a commodity.
A fierce legal battle in the apex court
The RBI argued that it has consistently opposed any unauthorized alternate payment system that can undermine the integrity of the country’s financial system. It added that denying access to such financial channels ensures the stability of India’s fragile banking sector. Interestingly, the bank stated that it had not formally banned cryptocurrency trading but merely warned the entities not to deal in virtual currencies.
The much-awaited decision comes after various petitions were filed in the apex court challenging RBI ban on cryptocurrency that imposed restrictions on persons and financial entities from trading in virtual currencies. Interestingly, the crypto futures trading in India is also rising gradually.
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