India’s Supreme Court Lifts Crypto Ban
The Supreme Court of India has overturned a ban on cryptocurrency trading in India, effectively legalizing cryptocurrencies in the country.
According to a report from Bloomberg, a commission of three judges, led by Justice Rohinton F. Nariman, ruled that the ban on cryptocurrency trading imposed by the Reserve Bank of India (RBI) in 2018 was “unconstitutional.”
While the country’s central bank hasn’t explicitly made owning cryptocurrencies illegal, it’s 2018 circular directed that all entities, including all banks which fall under its jurisdiction, were banned from dealing in virtual currencies and providing services to people and entities that deal in them.
The ruling came as a result of extensive lobbying and petitions signed by cryptocurrency exchanges, blockchain companies, and various other industry bodies struggling with the country’s ban.
Extensive arguments for removing the ban were made by the Internet and Mobile Association of India (IAMAI), attorney Ashin Sood, and counsel Nakul Dewan, who represented several cryptocurrency exchanges based in India.
The parties all questioned RBI’s power to enact such a ban in the first place, as cryptocurrencies aren’t recognized as “currencies” under current law. They argued that digital coins are actually commodities and, as such, it was unconstitutional to impose a ban that would prevent dealing with them.
Arguments in favor of the ban were laid out by Shyam Divan, the counsel representing the central bank, local news network NDTV reported. He argued that cryptocurrencies are “digital means of payment” and could jeopardize the country’s financial system.
However, the central bank’s 2018 circular was overruled on the grounds of “disproportionality,” in what many are calling a historic moment not just for India, but for the crypto industry as a whole.
“RBI needs to show at least some semblance of any damage suffered by its regulated entities. But there is none,” the court said in a 180-page ruling.
The reactions from the crypto community have been overwhelmingly positive.
Balaji Srinivasan, the former chief technical officer at Coinbase, called the event “amazing,” saying that India was finally back in the crypto game.
Jason Lau, COO of cryptocurrency exchange giant OKCoin, celebrated the Supreme Court’s decision saying that it opened up cryptocurrency access to over a billion people.
Nischal Shetty, founder of cryptocurrency exchange WazirX and a long-time advocate for the ban reversal, declared this a “historic day” for cryptocurrencies in India. The country, he said, can now finally participate in the blockchain revolution happening around the globe.
Speaking on Bloomberg Quint, Shetty said he expected the court’s decision to have a significant impact on the global crypto market in the near future, as India’s people will now be able to enter the industry more easily. The entrepreneur, whose cryptocurrency exchange was acquired by Binance last year, said that the lifting of the ban will open up a wide array of opportunities to crypto companies in India.
However, instead of spending resources on breaking into the global market, Indian startups should focus on servicing the Indian market. He also noted that a rise in investments in Indian companies is expected, as well as a more open attitude from local banks when it comes to dealing with crypto and blockchain companies.
Changpeng Zhao, CEO of Binance, one of the largest cryptocurrency exchanges in the world, also chimed, celebrating the effort of industry players pushing for crypto adoption. He noted that Binance was one of the few companies investing in crypto startups in India and that the lifting of the ban means more investments will be made.