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SUPREME COURT PERMITS CRYPTOCURRENCY TRADE, QUASHES RBI'S 2018 CIRCULAR

Team SoOLEGAL 5 Mar 2020 3:10pm

SUPREME COURT PERMITS CRYPTOCURRENCY TRADE, QUASHES RBI'S 2018 CIRCULAR

NEW DELHI: The Hon’ble Supreme Court struck down the curb on cryptocurrency trade in India.

"Trading in cryptocurrencies now will be allowed," the top court noted.

 

The Reserve Bank of India had banned cryptocurrency trading in India as it directed in a circular issued on 6th April 2018, that all entities regulated by it do not deal with virtual currencies or provide services to facilitate any person or entity to deal with or settle those.

Cryptocurrencies are digital currencies in which encryption techniques are used to control the generation of currency units and verify funds transfer, operating independently from central bank.

The RBI had stated that virtual currencies (cryptocurrencies and crypto assets) "raise concerns of consumer protection, market integrity and money laundering". Considering the associated risks, banks were told not to deal with crypto-related businesses.

 

An industry group of Internet and Mobile Association of India (IMAI) had challenged this circular before the Supreme Court.

"Investments had stopped and start-ups were staying away from starting business in the crypto and blockchain space in India which will change now that the Supreme Court has said that the RBI circular was unconstitutional," Nischal Shetty, CEO of WazirX, an Indian cryptocurrency exchange, told news agency Reuters.

Nevertheless, the industry is still facing obstacles as a government panel, appointed to look into the matter, has recommended that India ought to ban all private cryptocurrencies. The panel also recommended ten years of imprisonment and heavy fines for those dealing in digital currencies.

The government is yet to act on these recommendations and the rules on cryptocurrencies is yet to be finalized.

The government along with the central bank had cautioned the public on several occasions about the dangers of cryptocurrencies. If the government follows the recommendations of the panel, it might signal the end of road in India for these digital currencies.



Tagged: Supreme Court   cryptocurrency   Reserve Bank of India   RBI   trade   India  
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