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A historic day for the Indian crypto community, the supreme court has finally ruled on the case against the banking ban by the central bank, the Reserve Bank of India (RBI). The court held that the RBI circular which places a banking ban on the crypto industry is unconstitutional.
Supreme Court Rules: Big Win for Indian Crypto Community
On Wednesday, the Supreme Court of India finally ruled on the case against the banking ban by the Reserve Bank of India, local news platform Crypto Kanoon reported from the courtroom. “The Judgment Day has finally arrived,” the team wrote, tweeting at 10:45 a.m. (Indian Standard Time):
Breaking: Supreme Court of India has struck off Reserve Bank of India’s (RBI) banking ban against crypto. The court held that RBI circular dated 6th April 2018 is unconstitutional.
The supreme court concluded hearing the arguments against the RBI ban on Jan. 28, after almost two years since it first decided to hear the case. The court heard extensive arguments from the counsel for the Internet and Mobile Association of India (IAMAI), Ashim Sood, followed by the counsel representing several crypto exchanges, Nakul Dewan. It also heard the arguments in favor of the ban from the central bank’s counsel, Shyam Divan.
The RBI issued a circular in April 2018 banning regulated financial institutions from providing services to crypto businesses. The ban went into effect three months later and banks subsequently closed the accounts of crypto exchanges, forcing some of them to shut down, including Zebpay, Coindelta, and Koinex.
India’s Crypto Regulatory Framework
Cryptocurrency enthusiasts all over the world have been eagerly waiting to see what India will do about cryptocurrency. The Indian government has been sitting on a draft bill that seeks to categorically ban cryptocurrencies, except state-issued ones, since February last year. The “Banning of Cryptocurrency and Regulation of Official Digital Currency Bill 2019” was drafted by an interministerial committee (IMC) tasked with studying all aspects of cryptocurrency and providing recommendations for India’s crypto policy. The IMC was headed by former Finance Secretary Subhash Chandra Garg who has since resigned from his position in government. Nonetheless, he still holds the view that cryptocurrencies have “a very short future,” believing that they are “essentially worthless codes.”
The bill also provides for the RBI to issue a central bank digital currency. The RBI has already been looking into this area, Governor Shaktikanta Das revealed in December last year. “As and when the technology evolves with adequate safeguards, I think it is an area where the Reserve Bank will certainly look at seriously at an appropriate time,” he said.
Indian Finance Minister Nirmala Sitharaman received the draft crypto bill from the IMC back in February last year but has not made a decision on it. The bill was supposed to be introduced at the end of last year but was not.
This bill was expected to be introduced in the winter session of parliament last year but was not, and the government has since been silent about it. The crypto community believes that the bill is flawed and has been campaigning for the government to re-evaluate the IMC recommendations. Meanwhile, both the RBI and the Indian government have confirmed several times that cryptocurrencies, such as bitcoin, are not banned in India.
Thriving Crypto Industry in India
Even with a banking ban, the Indian crypto community found a way to continue buying, selling, and trading bitcoin and other cryptocurrencies. A number of crypto exchanges launched peer-to-peer trading in order to continue providing INR access to their users.
Several exchange service providers recently made announcements regarding their services. For example, the U.K.-based banking platform Cashaa has been expanding its operations in India and is now offering no-fee deposits and withdrawals. The company is also planning a roadshow this month to prepare Indian crypto users for the next bull run. Global exchange Binance and popular Indian exchange Wazirx have joined forces, with the latter launching India’s first initial exchange offering (IEO). The WRX token can be used to pay trading fees on Wazirx at a 50% discount.
Furthermore, Zebpay, formerly one of the largest bitcoin exchanges in the country, relaunched in India on Monday, ahead of the supreme court judgment. The exchange shut down its local operations in September 2018, shortly after the RBI ban went into effect. For the relaunch, the platform is offering five crypto-to-crypto trading pairs with no trading fees for the entire month.
What do you think of the Indian supreme court’s ruling today? Did you expect the court to rule in favor of the crypto industry? Let us know in the comments section below.
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