- Supreme court allows trading in cryptocurrency
- Now, “there is a likelihood of more mature and balanced regulation of cryptocurrencies”
Cryptocurrencies scored a victory in India after the Supreme Court of India struck down the curb on the trade of virtual currencies in the country on Wednesday.
In April 2018 the Reserve Bank of India made the decision to ban banks from offering their services to anyone supporting digital currencies. This decision was then challenged by crypto exchanges, startups, and industry bodies.
A three-judge panel headed by Justice Rohinton F. Nariman agreed with petitions and endorsed their stand against the curb in place by the central bank.
“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.
The opponents of the central bank’s curbs argued that the RBI didn't have the authority to issue or threaten the banks with a ban and furthermore, they hadn't properly researched digital assets.
Representatives from The Internet and Mobile Association of India (IAMAI) on behalf of crypto exchanges also argued that trading in digital currencies in the absence of a law banning was a “legitimate business activity under the Constitution.”
RBI defended in the Supreme Court that it wasn't singling out cryptocurrencies as a payment system, but rather that it opposed all forms of payments that could “undermine the integrity” of the central banking system. It further argued that there was no formal ban on cryptos under the law in India and it has been consistently warning about the inherent risks of virtual currencies.
Balanced Regulation Expected
With this new decision by the Supreme court, many businesses that shut down or drastically scaled back operations could see them come back to life. “We should see a lot of them restarting and a lot more activity happening around this space,” said Samuel.
CoinRecoil co-founder Kunal Barchha said his crypto exchange will be now approaching potential investors who it lined up initially for funding but backed down after the RBI’s ban.
“Now crypto traders, investors, miners, can proudly speak up about what they do for a living,” Barchha said. “Now they won’t be judged as criminals.”
The Supreme Court is separately hearing another case where it will decide on regulations for digital currencies. Wednesday's judgment also weakens the case for strict standards.
“Cryptocurrencies are an exciting technology that needs to be carefully studied,” said Vaibhav Kakkar, a partner at law firm L&L Partners.
“With this order, there is a likelihood of more mature and balanced regulation of cryptocurrencies and the fintech sector as a whole.”