Supreme Court allows cryptocurrency trading, quashes RBI's ban
What's the story
In a major development, the Supreme Court of India has allowed cryptocurrency trading in the country. The trading of virtual currencies like Bitcoin and Monero was banned by the Reserve Bank of India, but the apex court has now struck down the curb, deeming it completely illegal. Here's all you need to know about it.
Ban
RBI had banned crypto-trading in 2018
In April 2018, the RBI had issued a circular outlawing all kinds of cryptocurrencies in the country. The order not just restricted RBI-regulated financial institutions and firms from trading in crypto-coins but also barred them from providing services facilitating any third-party individual or entity dealing in virtual coins. The move had drawn a lot of flak from Indians, given the rise of cryptocurrencies lately.
Information
Three months were given to end services in operation
When the ban was imposed, RBI had given financial institutions serving people/entities dealing in virtual currencies a period of three months to wind up their operations. The central bank had also issued circulars warning cryptocurrency users/traders about the risks associated with illegal trading of crypto-coins.
SC's order
However, now, the ban has been quashed
After hearing several petitions challenging RBI's ban, the Supreme Court of India has now declared the directive illegal, setting it aside completely. This means that soon RBI-regulated financial institutions, private entities, and individuals will be allowed to trade in all sorts of cryptocurrencies, starting from Bitcoin and Ethereum to Monero and Ripple. We might even see several crypto-exchanges operate legally in India.
Information
Bench headed by Justice Rohinton F. Nariman announced the verdict
Notably, the verdict on cryptocurrency trading was announced by a three-judge bench headed by Justice Rohinton F. Nariman. It had heard petitions filed by several cryptocurrency exchanges, start-ups, and industry bodies that needed bank services to continue dealing in digital currencies.
Boost
This marks a major boost for cryptocurrency business, investors
The decision to revoke the ban marks a major boost for businesses/investors dealing in cryptocurrencies in Asia's third-largest economy. However, it's worth noting that the government of the country is already mulling strict rules to curb cryptocurrencies, including fines and 10 years in prison for those mining, holding, selling, or trading cryptocurrencies. A separate SC case will decide on those regulations.