- India’s supreme court squashes RBI’s 2018 ban on banking support to cryptocurrency firms.
- Internet and Mobile Association of India argued that cryptos are more like commodities than currencies.
A three-judge bench in India’s Supreme Court led by Justice Rohinton Nariman has lifted the ban the Reserve Bank of India (RBI) has imposed in April 2018 to stop banking support services to cryptocurrency-related businesses including exchanges. The directive had been challenged by the Internet and Mobile Association of India (IMAI).
IMAI argued that the central bank had no jurisdiction imposing a ban on cryptocurrencies since they are not recognized as “currency” in India and in accordance with the law. In other words, IMAI maintained the argument that cryptocurrencies are more like commodities than currencies.
In its defense, the RBI told the Supreme Court that it had based its decision on the basis that cryptocurrency is a digital means of payment. Therefore, it was the mandate of the central bank to cut the encroachment of digital assets into the traditional system of payment, a move, if left to mature, could jeopardize India’s inherence payment system.
The RBI has since 2013 been warning its citizens to keep off digital assets due to the financial and security risks that come along with them. The ban in April 2018 had stopped banking support to crypto-related companies. The directive was sent to all entities regulated by RBI. The Hindustantimes reports that the RBI’s ban was guided towards “consumer protection, market integrity and money laundering around virtual currencies, also referred to as cryptocurrencies and crypto-assets.”
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