By James Mathew
This followed India's apex court lifting curbs imposed by RBI on trade in virtual currency and cryptocurrency
India’s apex court on Wednesday lifted the curbs imposed by the Reserve Bank of India on trade in virtual currency and cryptocurrency.
A three-judge bench of the Supreme Court of India quashed the central bank's order after hearing the petitions challenging the April 2018 circular imposing the ban on financial services providers.
The bench, headed by Justice Rohinton Nariman, and comprising Justices S Ravindra Bhat and V Ramasubramanian, allowed the petition on the "ground of proportionality".
The RBI circular banning trade in cryptocurrency and virtual currency issued on April 6 2018, came into effect in July.
Industry analysts said the apex court ruling will lead to many of the companies that shut their operations due to RBI’s circular coming back in the business.
“We should see a lot of them restarting and a lot more activity happening around this space,” Ajay Kedia of Kedia Commtrade and Research, said.
The apex court had on January 28 reserved the judgement on a batch of petitions which had contended that cryptocurrency is similar to a commodity and not a currency.
The central bank defended in the Supreme Court its 2018 circular insisting that it had always been consistent in its opposition to allowing any other payments systems and undermining the integrity of the banking system.
It argued that imposition of such a ban on banking services is well within the domain of the central bank, and that its action was aimed to prevent cryptocurrency industry from adversely affecting payment services in India.