India’s Supreme Court Allows Cryptocurrency Trading
The Supreme Court of India lifted the Reserve Bank of India’s (RBI) curbs on cryptocurrency trading in the country.
This brings to an end the ban on the country’s commercial banks and other financial institutions providing services to businesses and individuals dealing in cryptocurrencies such as Bitcoin. The RBI had imposed the ban in April, 2018, but it was effective from July 2018.
The top court ruled that the curbs were unreasonable and illegal. The top court’s order followed a plea by a group of petitioners and the Internet and Mobile Association of India (IMAI) challenging the RBI ban.
IMAI had argued that cryptocurrency is not strictly currency and was more in the nature of commodity.
While many regulators around the world have been warning against trading in Bitcoin, some have backed it.
Earlier, in 2019, the RBI also had said cryptocurrencies such as Bitcoin and other crypto-assets currently did not pose risks to global financial stability. This was revealed in a document published by the RBI then titled “Report on Trend and Progress of Banking in India 2017-18.”
Following the RBI’s circula, many Indian cryptocurrency exchanges tried to obviate the difficulties by either introducing a peer-to-peer facility or shifting base from India or closing down operations. Some of them have also migrated their operations to crypto-friendly destinations.
The unfavorable environment for dealing in cryptocurrencies such as Bitcoin and Ethereum had made it costly for blockchain developers, services providers, and companies dealing in cryptocurrency trading to operate in India.
In April 2018, the RBI had initially considered launching its own central bank digital currency called “Laxmi” as a stablecoin tied to the rupee. However, it shelved the idea later saying it’s too early to even think about it.
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