In what is great news for India’s crypto community, the Supreme Court of India has struck down the Reserve Bank of India’s (RBI) banking ban on Bitcoin and other cryptocurrencies. The apex court ruled that RBI circular dated April 6, 2018 is illegal and the circular is likely to be withdrawn by the RBI.
Abhishek Gopal, founder of cryptocurrency exchange and blockchain startup ThroughBit, told Inc42 that the positive outcome is a validation of the fight the crypto community has been fighting for the last seven years. “The court took time but came up with a positive decision. This will have a ripple effect in the crypto ecosystem. With banking being available now, a lot of services around crypto will now be launched,” Gupta added.
In April 2018, the Reserve Bank of India had virtually banned cryptocurrency trading in India even though no official full ban was announced. The RBI directed that all entities regulated by the bank to not deal in virtual currencies or provide services to businesses or individuals facilitating exchanging or trading of cryptos. It had also issued circulars cautioning users, holders and traders of virtual currencies, including Bitcoin. Bitcoin is currently the most-valued cryptocurrency in the world and is trading at $8,821 at the time of writing, with a market cap of $161 Bn.
Boom Time For India’s Crypto Startups?
India’s cryptocurrency community has been battling the quasi ban for nearly two years. Many startups have had to shut shop since then, but some survived the storm to even attract M&A interest. Crypto startup WazirX was acquired by Binance in late 2019.
WazirX founder Nischal Shetty told Inc42 that this is a historic day. Now, anyone who wants to start a cryptocurrency startup — exchange, smart contracts — can do it easily. Shetty expects the crypto market to have over 100 startups along with VC investments, better jobs and a real contribution to the economy.
Speaking about the cryptocurrency startups in India that had to shut down due to unclear rules, the WazirX founder said that many of them could launch back thanks to this clarity. Shetty now wants to work with the regulators to create a better framework and also work towards improving the presentation in the draft cryptocurrency bill. Binance celebrated the announcement and welcomed Indian users to the crypto fold.
The central government, which was one of the respondents in the case filed in the Supreme Court of India against the RBI circular. The government had submitted the copy of draft Banning of Cryptocurrency & Regulation of Official Digital Currency Bill 2019 to the court. The government, in an affidavit, also told the court that it would soon introduce the bill in the Parliament. However, surprisingly, the government didn’t introduce it in the pre-budget and winter sessions of the parliament.
Despite the finance minister Nirmala Sitharaman extending her support to the draft bill, sources close to the development had earlier told Inc42 that the bill is under reconsideration and the government is also under the impression that there is room for the draft modification to support the cryptocurrency community in India.
With inputs from Bhumika Khatri