India’s Supreme Court Lifts Central Bank Ban on Crypto Trading
With the court victory of India’s cryptocurrency exchanges over the Central Bank’s ban on crypto trading, this could all translate to a surge in cryptocurrency trading volumes in the coming months.
On April 6, 2018, The Reserve Bank of India (RBI), India’s central bank, issued an order that prohibited commercial banks from providing services to entities dealing with cryptocurrencies. However, the Supreme Court overturned this order in February of this year, calling it unconstitutional. This brought a huge sigh of relief to the crypto market community.
Effects of the ban and the court victory
Because of the ban lift, Indian traders can now directly deposit Indian Rupee from bank accounts to crypto exchanges. This is more convenient for traders and cryptocurrency users to cash in or cash out of their holdings.
Indian trading and its trading volumes were doing very well in the past, contributing some $50 million to $60 million per day before the RBI ban. Due to the RBI’s lack of awareness and information, bank deposit volumes significantly decreased because account holders could no longer engage in cryptocurrency transactions. Credit card use and payments also decreased due to the ban.
More focus on bank compliance
The ruling was based on a misleading misconception that cryptocurrency trading can be exploited for illegal activities such as money laundering and tax evasions. However, these activities are more the exception than the rule, with many pointing out that most illegal monetary activities are still carried out using offshore bank accounts and real currency. The RBI order also carried a misconception that the law prohibited cryptocurrency trading.
In fact, crypto trading exchanges are the exact opposite of illegal, doing their best to comply with banking rules that cover know-your-client (KYC), user data privacy, and other RBI-based regulations. This is because both the crypto traders and banks understand that this symbiotic relationship actually benefits many people and the economy in the long run, and is entirely legal.
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