India’s top court has given a decision on 4th March 2020 to lift the ban on Crypto Currency Trading in India. The Supreme Court has retracted an order given by Reserve Bank of India dated April 6, 2018, which discontinued all services from banks to company’s dealing with cryptocurrencies. The Reserve Bank banned digital currencies after scrutiny by financial regulators as well as the Indian government, which called it a “Ponzi Schemes” and threatened to impose harsh regulations.
The country’s exchanges were doomed because they could not use Indian Banks for their operations majorly dealing in different virtual currencies. This decision forced many of the exchanges to shut down operations. India accounted for around 3% of the cryptocurrency market before the ban.
But after the verdict in exchange’s favor, Indian cryptocurrency exchanges celebrated the verdict. It is being said by many exchange owners that growing interest in virtual currencies meant there is “tremendous scope going forward.” In simple words, Indian traders will now be able to directly deposit Indian rupee (INR) from bank accounts to crypto exchanges. This will help traders into more convenient transactions of their holdings.
India was doing very well in terms of trading volumes, contributing about $50 million to $60 million per day before the RBI ban. After the Central Bank’s restrictions volumes have significantly dipped and commercial banks advised account holders not to engage in cryptocurrency transactions.
Because of that Indians, crypto traders used peer-to-peer crypto trading platforms, which allow direct transfer of cryptocurrencies into the individual accounts without the intervention of any financial institution or government authority. Though liquidation of cryptocurrency holdings is quite difficult while using peer-to-peer platforms.
Also, RBI’s decision was widely misinterpreted as legal ruling deeming cryptocurrency trading as an unlawful activity. With the Supreme Court’s latest ruling, the situation is widely expected to change for the good.
The Supreme Court decision to lift the ban is a forthcoming step and cryptocurrency exchanges will now start focusing on deploying stronger know-your-client (KYC), user data privacy, and AML policies.
Indeed, that would help build trust and reduce risks of cryptocurrency transactions being exploited for illegal activities, such as crimes, money laundering, and tax evasions.
The general consensus is the Supreme Court’s ruling would open a path to favorable regulations towards protecting all stakeholders, including companies, customers and users.
This ruling will open gates for more business or startups to start the crypto business in India. Companies who shut down operations may again start operations in India as this business is a lucrative one. In the future, it can be seen that many big players can also come into this business. The Indian government can also start its own cryptocurrency as rumored before.
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