The RBI clarified as a response to the legal case that was filed by the Internet and Mobile Association of India, that the benchmark cryptocurrency is not banned in the country of India. The Reserve Bank of India says that it has only restricted some regulated financial establishments from having to deal with anyone that uses digital currencies as we reported in the previous bitcoin news.
The IAMAI also consists of a few crypto exchanges and it filed a petition against the RBI directive from 2018. It was considered that the central bank banned all kinds of usage, purchases or trading that will involve digital assets. The petition became a full-scale legal case that had the Supreme Court hearing recently. The association indicated that the decision of the central bank of India was illegal. They argued that the crypto trading is actually a legit business since there’s no actual law that forbids it.
According to a recent report, the RBI clarified its stance on a 30-page affidavit and it clarifies that the bank has never actually banned cryptocurrencies but only ‘’ringfenced’’ regulated businesses from having to deal with cryptocurrencies:
“Firstly, the RBI has not prohibited VCs (virtual currencies) in the country. The RBI has directed the entities regulated by it to not provide services to those persons or entities dealing in or settling VCs. The RBI has been able to ringfence the entities regulated by it from being involved in activities that pose reputational and financial risks along with other legal and operational risks.”
India has no shortage of problems when it comes to cryptocurrency or Bitcoin. The IAMAI’s legal case was only a reaction to the mentioned cases after the 2018 RBI directive. The cases noted back then that the banks and other regulated financial entities have to stop operating with the individuals or businesses that use digital assets. Some of the banks officials that operated with cryptocurrency stated that this could only bring an unwanted amount of risk:
“Virtual Currencies (VCs), also variously referred to as cryptocurrencies and crypto assets, raise concerns of consumer protection, market integrity, and money laundering, among others. In view of the associated risks, it has been decided, with immediate effect, entities regulated by RBI shall not deal with or provide services to any individual or business entities dealing with or settling VCs.”
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