The Supreme Court of India has quashed the ban on the trade of digital currencies in the country on Wednesday.
A three-judge panel headed by Justice Rohinton F. Nariman endorsed their stand against the ban and agreed with petitions, marking a victory for the country’s crypto enthusiasts.
In April 2018 the Reserve Bank of India released a circular where it directed the banks and financial institutions to not offer their services to any individual or business supporting digital currencies. The decision effectively banned the trading of bitcoin and cryptocurrencies. But was then challenged by crypto startups, exchanges, and industry bodies.
“It’s a very positive sign that has come through, something that we have been waiting for and expecting for two years now. Most of the infrastructure and bits and pieces towards the cryptocurrency was already built out over the last few years,” said Benson Samuel, Director of Technology at Tokenyz Ventures.
Since then, the crypto industry of India has been working on getting this ban lifted and finally today gained a huge victory. The opponents of the Indian central bank’s curb on crypto trading argued in the Supreme Court that the Reserve Bank of India wasn’t empowered to issue such a directive to the banks. It further argued that the bank hadn’t even studied the matter adequately.
The Internet and Mobile Association of India (IAMA), representing cryptocurrency exchanges argued that in the absence of a law banning such activities, trading in virtual currencies was a “legitimate” business activity under the Constitution.
RBI, on the other hand, defended its decision by stating that it had always been consistent in its opposition to allowing any other payment systems that undermines the banking system’s integrity. It further argued that the bank consistently clarified that there was no formal ban on cryptos under the law in India while warning about the inherent risks of trading in virtual currencies.
Supreme Court crushing RBI’s crypt ban has the market excited with many companies that took a back step now ready to come back in the business.
“We should see a lot of them restarting and a lot more activity happening around this space,” said Samuel.
The Indian Supreme Court is hearing another crypto-related case separately where it will decide on regulations for cryptocurrencies but the judgment passed on Wednesday is expected to weaken the case for strict standards.
“Cryptocurrencies are an exciting technology that needs to be carefully studied. With this order, there is a likelihood of more mature and balanced regulation of cryptocurrencies and the fintech sector as a whole,” said Vaibhav Kakkar, a partner at law firm L&L Partners.