Cryptocurrencies return in India, SC lifts ban imposed by RBI on Bitcoin, Ripple & others

Cryptocurrencies including Bitcoin, Ripple, Ethereum & others are back in India, as Supreme Court ruled in favor of Internet and Mobile Association of India (IMAI). Supreme Court of India on Wednesday allowed dealing in cryptocurrency, quashing an earlier ban imposed by the Reserve Bank of India (RBI) on trading in cryptocurrencies such as Bitcoin & Ripple.

The recent development came as a major relief for the cryptocurrency enthusiasts and across entire sector. On March 4, RBI’s ban restricting lenders from facilitating banking transactions for cryptocurrency exchanges and traders, lifted by Supreme Court.

Cryptocurrencies back in India

Hon’ble Supreme Court of India on Wednesday ordered following a plea by the Internet and Mobile Association of India (IMAI) objecting the RBI ban on cryptocurrencies. IMAI had filed a plea against RBI’s ruling in use and trading of Cryptocurrencies like Bitcoin, Ripple, Ethereum & others. IMAI industry body’s members had carried out cryptocurrency transactions among each other, had claimed that RBI’s move was not lawful as there was no law on cryptocurrency so far in Country. RBI had banned the Cryptocurrencies’ business activity across India in 2018.

Earlier Internet and Mobile Association of India had argued that cryptocurrency (Bitcoin/ Ripple/ Ethereum etc) is not strictly currency and is more in the nature of commodity. Filed plea by IMAI stated that, RBI does not have any power to impose such ban in the absence of a law in that regard prohibiting cryptocurrency and its use in Country.

In April 2018, the central bank RBI tightened the rules and denied the use of cryptocurrencies.

Cryptocurrencies' History in India & beyond

Cryptocurrencies like Ethereum, Bitcoin and Ripple are digital currencies in which encryption techniques are used to regulate the generation of units of currency and verify the transfer of funds, operating independently of any Government’s/ Bank’s or any authority’s involvement.

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While many regulators around the world have been warning against trading in bitcoins, some have backed it. In 2017, Japan accepted bitcoin as legal currency and even officially recognised Bitcoin exchanges.

In late 2017, the use of Cryptocurrencies and trading rose to three and half times in just 35 days to reach almost $20,000. Later after Governments’ decisions and ruling over the labeling use and trading illegal, the trading slumped 70 per cent in next few weeks.