Historical Day For India’s Crypto Firms as Supreme Court Strikes Down RBI’s Prohibition
It is a historical day for crypto related businesses and enthusiasts in India. The country’s highest judiciary, Supreme Court of India, has over turned the RBI’s (Reserve Bank of India) arguable blanket ban on banks businesses with companies involved in cryptocurrencies.
The decree was given by Supreme Court bench comprising of judges Rohinton Nariman, S Ravindra Bhat, and V Ramasubramanian.
The news was revealed by litigation related news portal Live Law.
Back in April 2018, RBI, which is India’s central bank, had instructed banks to stop offering its service to crypto associated firms. The order became effective on July 2018.
Soon a series of petitions by individuals and members of crypto industry, challenging the order of central bank, was filed in Supreme Court by the Internet & Mobile Association of India (IAMAI).
For more than two weeks in January 2020, the Court had hearings on the case.
IAMAI, non-profit organization tasked with the job of petitioning governments in favor of internet sector clients, investors and shareholders.
Members include Apple, Yahoo! India, eBay, Etsy, and Unocoin. Live Law has reported that the justices passed a decree that the RBI’s action was “disproportionate.”
The central bank’s claim in the case was that cryptocurrency is an electronic means of payment and that the organization was “empowered by law” to interfere in the matter.
This was refuted by IAMAI’s advocate Ashim Sood, who contended that cryptos can both serve as a store of value (a commodity per say) and also as a medium of exchange. Sood disputed that RBI did not have the legal power to prohibit financial entities from offering services to crypto related firms.
With the court giving its judgment on the benchmark RBI lawsuite, the legislative and governing rules for cryptos in India now seems to stare at one last obstacle.
In the final quarter of December 2019, Indian government postponed the tabling of a bill that could have paved way for a likely crypto prohibition.
The bill entitled “Banning of Cryptocurrency & Regulation of Official Digital Currencies” is intended to implement a blanket ban on the use of crypto in the country and also to lay the necessary framework for a state-backed “Digital Rupee” issued by the RBI.