Indian Crypto Community Rejoices Historical Ruling by Supreme Court of India lifting ban on Crypto-currencies


Supreme Court of India has finally lifted
the ban on cryptocurrency trading in India, while rejecting previous directions
given by the Central bank of India i.e. Reserve Bank of India (RBI). The RBI
had prohibited banks and financial institutions from offering crypto-related
services through a circular in April 2018.
The
decision of the Supreme Court has been considered as a historical judgment that
has generated a euphoria among the crypt community in India.
A common Petition was filed under the
banner of Internet and Mobile Association of India (IAMAI), on behalf of
several crypto-related businesses and public litigations against the RBI’s
restriction on offering the bank services to the crypto-businesses back in
April 2018.
A bench of three judges was hearing the
case which was headed by Justice RF Nariman and included Justice Aniruddha Bose
and V. Ramasubramanian as the member judges. While reading the verdict the
bench stated, “We have allowed the writ petition.”
Legal Battle between RBI and Internet and
Mobile Association of India (IAMAI)
In April 2018, RBI had directed all the
financial regulators including the banks to not provide services to businesses
dealing in cryptocurrencies. The decision was supposedly taken to minimize the
risks of money laundering and financial fraud.
The RBI then had released a prohibitory
statement which stated, “In view of the associated risks it has been decided
that with immediate effect entities regulated by RBI shall not deal with or
provide services any individual or business entities delete with or settling
VCs.”
Following this decision, in July 2019, a
government panel had recommended a ban on cryptocurrencies usage and trading
and a jail term up to 10 years with heavy penalties, for dealing with
cryptocurrencies.
The panel also had prepared a report and
drafted a bill then which was supposed to be presented in the parliament in
January 2020 after the evaluation from financial authorities and government.
The panel had even suggested the government launch a government-supported
digital currency in India.
The RBI order was challenged by a plea by
the Internet and Mobile Association of India (IAMAI), against the ban on
cryptocurrency.
IAMAI had been arguing that crypto
assets are not a currency but they fall under commodity and the RBI does not
have the powers to ban them without any legislation.
RBI was defending that right from 2013, it
has been issuing a precautionary warning to the cryptocurrency users not to use
crypto assets as a medium for payment to avoid financial risks.
How the verdict will affect the
Indian Economy?
The crypt community in India had rejoiced
over the verdict of the Supreme Court. Experts believe that this decision will
escalate the crypto industry in India and will boost the gloomy economy and
will create massive job opportunities.

Jayashree Ingle
CBW - External Analyst
INDIA