Cryptocurrency news: SC allows cryptocurrency trading, cancels RBI circular 2018 | India Business News
“The cryptocurrency trade will now be allowed,” the higher court said.
In April 2018, the RBI issued a circular that prohibits banking and financial services from trading in virtual currency or cryptocurrency such as Bitcoin, the most valuable cryptocurrency in the world.
Cryptocurrencies are digital currencies in which encryption techniques are used to regulate the generation of monetary units and verify the transfer of funds, operating independently of a central bank.
The RBI had stated that virtual currencies (VC) (cryptocurrencies and crypto assets) “raise concerns about consumer protection, market integrity and money laundering.” In view of the associated risks, banks were asked not to deal with businesses related to cryptography.
This circular was challenged by an Internet industrial group and the Mobile Association of India (IMAI) before the SC.
“The investments had stopped and the new companies were staying away from starting business in the cryptocurrency 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, tld Reuters news agency.
However, the industry still faces obstacles when a government panel, designated to investigate the matter, recommended that India should ban all private cryptocurrencies. In July, the panel also recommended a prison sentence of up to 10 years and heavy fines for anyone operating with digital currencies.
However, the government has not yet acted in accordance with these recommendations and has yet to finalize the regulations on cryptocurrencies.
On several occasions, the government together with the central bank warned the public about the risks of cryptocurrencies. If the government follows the panel’s recommendations, it could signal the end of the road for these digital currencies in India.
(With Reuters tickets)